Wednesday, February 27, 2013

Indianapolis Public Safety Departments Facing 5% Budget Reductions

It's maddening listening to President Barack Obama and congressional Democrats warn of dire consequences that will occur if the federal government is forced to make a 2% budget cut after years of escalating federal spending that has outpaced the rate of inflation and as Americans' incomes have actually been falling, forcing them to cut their own family budgets to make ends meet. Here in Indianapolis Public Safety Director Troy Riggs sent an e-mail to all employees of the Department today informing them of the need to reduce this year's budget by 5% due to "the greatest economic downturn since the great depression" without the need of resorting to layoffs:
As you all know, our nation is in the midst of the greatest economic turn down since the great depression.  As a result, the local economies have suffered greatly.  While we live in a city that has weathered this storm better than most, it has still caused significant challenges.  During my tenure here, the Department of Public Safety leadership has worked hard to ensure that we are being fiscally responsible, while meeting the needs of our community.  In order to achieve this goal we are initiating over 30 efficiency teams this year, instituting administrative review processes, and developing business plans.  The goal of all these initiatives is for the Department of Public Safety to be as efficient and as effective as possible.
Due to the continued economic climate, the Mayor and Council have asked each agency within city/county government to develop an overview of budgets with a 5% decrease.  Before rumors become rampant, let me point out that this is a fiscal exercise to ensure that all departments are being fiscally responsible.  This process began yesterday with a review of my executive office, Animal Care and Control, and Homeland Security.  This morning at 9:30 a.m. a committee discussed the IMPD budget.  The discussions were open and operational concerns were addressed.
Let me assure you that there have been no decisions made at this time.  Information regarding items discussed will be shared with each division within the Department of Public Safety by your Chief or Director.   Your leadership has worked very hard identifying 5% reductions.  I want to assure you that all reductions were reviewed with the firm commitment that layoffs would not be recommended.
In conclusion, this is a difficult process that no one is enjoying.  I ask for you to feel free to send recommendations directly to your leadership or to me.   Additionally, please utilize the email to share concerns.   I do, however, need to be clear that this fiscal exercise is being done to protect the financial future of Indianapolis. 
Thank you,
It's obvious the administration is not only seeking budget cuts to deal with the Department of Public Safety's budget woes. As I recently reported, the Indianapolis Fire Department has implemented a blatantly illegal self-inspection program that compels all building owners and their lessees to voluntarily perform fire safety inspections of their premises by completing a more than 40-question affidavit under penalties of perjury and paying a $25 fee. Those who refuse to participate in the self-inspection program are told they will be subject to annual inspections costing them between $50 and $150. Conservative estimates are that this illegal self-inspection program, if enforced across-the-board, could raise several million dollars annually for the Fire Department. The Department has no authority under state law to delegate the responsibility of inspecting buildings for compliance with fire codes to building owners and lessees. Instead, the Department is relying on a recently enacted city council ordinance sponsored by Councilor Vernon Brown, a Fire Department battalion chief, that received very little discussion and left most councilors in the dark as to exactly what they were voting on.

Since I've first reported on the illegal self-inspection program, I've been contacted by numerous business owners and institutions inquiring about the notices they received from IFD. Everyone is wondering why the mainstream news media has not reported on it. I've been told by one business owner who contacted the Greater Indianpolis Chamber of Commerce, which apparently was caught flat-footed by the new self-inspection program, that the Mayor's office was upset how that program had been rolled out to the public. That business owner was assured by the a Chamber representative that the matter was being rectified, but other building owners and lessees who have called the Fire Department to inquire about the program have essentially been told to pay up and shut up.

Here's the video of the council debate (or lack thereof) on the passage of the self-inspection program for fire code compliance, which Councilor Mary Moriarty Adams says IFD claims will only raise a little over $636,000 annually in inspection fees to offset inspection costs--a flat out lie as the program is being implemented by IFD. Clearly the overly-broad application to include every single lessee, including those in one-room offices in multi-tenant buildings, will raise millions annually for IFD. The Department is trying to shift this burden to business owners because it simply doesn't enforce the state law by conducting inspections of buildings on any periodic basis with its current skeleton staff. Not a single council member asked a question or debated the proposal before voting on it. This is just another example of why this is the state's worst city council.

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Mass Transit Insanity

You can't pick up a copy of the Indianapolis Star (or scroll through its web pages if you're an Internet reader) without being overwhelmed with news stories, columns and editorials drilling into your mind that there is absolutely no question about it: The only sensible thing the Indiana General Assembly can do this session is advance a proposal to allow for massive local income tax increases to finance a multi-billion dollar metropolitan mass transit boondoggle being advanced by the pay-to-play contractors for a return on the campaign contributions they've made to purchase our easy-to-buy state lawmakers. Fellow blogger Fred McCarthy couldn't help but notice the irony amidst all the mass transit propaganda in the Star with this story on those same news pages about the latest I-69 project to reduce gridlock along the I-69 corridor on Indianapolis' northeastside:
Just when you thought the Interstate 69 construction couldn’t get any worse, the state says more changes are coming to the Fishers area.
The newest component of the multi-million dollar project, Operation Indy Commute, is an $11 million contract awarded to Goshen-based Rieth Riley Construction Co, Inc., that calls for two main improvements: adding a new lane along the five-mile stretch of southbound I-69 from 116th Street/Ind. 37 interchange in Fishers to I-465; and building auxiliary lanes that will connect three interchanges along I-69. The price tag of the project is about $29 million.
INDOT spokesman Nathan Riggs said the auxiliary lanes will alleviate some of the traffic congestion at the 82nd, 96th and 116th street interchanges.
“For people who might be coming from 116th Street down to 96th Street, they won’t have to go to I-69, they can just get on the interchange and drive through there,” Riggs said. “There’s currently a lot of that interchange to interchange traffic that’s merging in and out of I-69. Not only does it (adding auxiliary lanes) increase capacity, but prevents cars from having to merge.”
INDOT officials held an open house Monday at the Fishers Train Station, 11601 Municipal Drive, to give an update on its new projects. About 30 people came, including Bret Anderson, who has lived in Fishers for about 30 years . . .

It’s still too early to give a specific timeline on the rest of the mainline I-69 project, Riggs said, but the work will be done in segments.
At the open house, INDOT officials also talked about the other component of the project that began in April and focuses more on the 116th Street/Ind. 37 interchange along I-69 from the northbound side. The goal is to widen shoulders and add more lanes to accommodate traffic traveling in and out of the interchange. The $18.2 million project also includes a new flyover ramp that will carry two lanes of northbound traffic from I-69 to Ind. 37 . . .
Fred McCarthy has one word to describe it: "Astonishment." We prefer insanity, which is defined as doing the same thing repeatedly and expecting a different result. But McCarthy's point is that we continue to invest huge sums of money to make commuting to work by automobile more convenient by building new roads, interchanges and widening existing roads at the same time we're subsidizing private developers to build more parking garages to park all those cars. And all of those projects have the blessings of the Indianapolis Star. As McCarthy puts it:
One has to wonder. Are the people responsible for these projects actually talking to each other? Driving is made easier. Residential units downtown are being encouraged, if not actually subsidized. And the city is building and giving away parking garages. Who will use mass transit?
Well, there are thousands of ordinary Indianapolis residents who do need public transit back and forth across town to work, shop, visit, whatever. We’re all for that. But "express routes" with stops every eight to ten blocks won't be much help to those folks. We most certainly oppose using additional public funds to make life easier for those who have made the choice to live in suburbia. We don’t need rapid transit on the Stadium-to-Palladium route . . .  
An old friend is credited with the saying, "It's a mighty thin pancake that don't have two sides." In the local print media, mass transit has become a "mighty thin pancake."
The same folks pushing for a metropolitan mass transit plan over at the State House are pushing all those road projects because they're all a part of an elite group of government contractors who simply live off publicly-financed public works projects. They don't support mass transit because we need it. They support mass transit because they're looking for another massive, publicly-financed project that will keep money flowing to them for a few years until they concoct their next great public works project. They're paying actors to appear at legislative hearings pretending to be down-on-their luck poor saps who can't get to work because there ain't no bus to ride and they can't afford a car. Any lawmaker who actually believes these people testifying are real and not just paid actors are even more stupid than I gave them credit for being. And if these so-called employers out there truly can't get people to show up for work to their minimum wage paying-jobs, then they should spring for a shuttle van to transport their workers to and from work. Don't look to the rest of us to tax and spend billions to accommodate the minuscule portion of commuters who prefer to ride a bus or train. And please, please, stupid politicians, stop pretending you care about people. You only care about the lobbyists shoving campaign contributions into your pockets, buying dinner for you at St. Elmo's and giving you free tickets to Colts and Pacers games to support this poorly-conceived mass transit plan, which seems to change by the hour but continues to have the same high price tag.

Tuesday, February 26, 2013

Pacers-Golden State Brawl Ends With Hibbert's Ejection

The Indiana Pacers we've come to know returned in their full glory tonight when a shoving match between Roy Hibbert and Golden State's David Lee led to a full-blown brawl that spilled into the seats behind the baseline. Hibbert's ejection during the fourth quarter brawl wasn't enough to stop the Pacers from posting a 108-97 win tonight over the Warriors at Banker's Life Fieldhouse.

Star's Obsession With Don Marsh Overlooks The Obvious

Don Marsh was one of the Indianapolis Star's favorite corporate citizens when he held the reins of the family grocery store chain that bears his name--one of the newspaper's largest single advertisers. Following his ouster as the company's CEO after Sun Capital's acquisition of the business, the Star no longer had much use for him and his every peccadillo seems to have become fodder for front-page news in the Star. Today's news story was no different:

Indiana Commerce Secretary Attending YPO Global Leadership Summit In Turkey With Ersal Ozdemir

Indiana Secretary of Commerce Victor Smith and several staff members of the Indiana Economic Development Corporation are traveling this week on a four-day trade mission to Turkey. When Advance Indiana first contacted Governor Mike Pence's media office to learn more about the trade mission and those who accompanied Smith on the trip, we were directed to a spokesperson for the Indiana Economic Development Corporation, Katelyn Hancock. In her initial response, Hancock described the trip as "a short, targeted trip" to meet with business leaders in Turkey "to discuss potential investment opportunities in Indiana." Hanckock said "no other business leaders" from Indiana were accompanying Smith on the trip.

When Advance Indiana informed Hancock of sources claiming that Ersal Ozdemir, a politically-connected contractor and Turkish immigrant who recently announced his success at landing a professional soccer team for Indianapolis, had traveled with Smith to Turkey, she confirmed Ozdemir's participation in the trip. Hancock acknowledged that Ozdemir had traveled with Smith and IEDC officials to Istanbul "at his own expense" to help "introduce IEDC staff to leaders in the Turkish business community." Hancock added that Smith would be "presenting to business leaders at the 2013 YPO Global Leadership Summit in Istanbul," an organization of which Ozdemir is also a member and a conference he is also attending. IEDC is listed as a sponsor of this year's conference.

Carson's High School Moment

Gov. Mike Pence with Indiana congressional delegation during trip to Washington (Photo: Howey Politics)
 When I was in high school, the class clowns used to wreak havoc on the best-laid plans of year book editors by marring group photos with obscene gestures. It looks like U.S. Rep. Andre Carson gets the prize for class clown in this group photo taken of Indiana's congressional delegation in Washington with Gov. Mike Pence.

Monday, February 25, 2013

Senate Sponsor Of $100 Million IMS Subsidy Says It's Not A Bailout

The proponents of legislation before the Indiana General Assembly don't seem to agree on their talking points as to why it's necessary for Indiana taxpayers to provide up to $100 million in subsidies to the Indianapolis Motor Speedway over the next 20 years. The IMS' CEO Mark Miles says the investment is needed because of substantial improvements the IMS is required to make to its motorsports track facilities, and to restore the track to a top-tier status among race tracks that it has lost in recent years as newer and better tracks have been built. Sen. Luke Kenley says the IMS had no choice but to seek assistance from the state because "they don't see where they can find the capital resources they need in any other way." And Sen. Mike Young, the principal sponsor of the legislation, says the public subsidy is necessary to stem declining revenues generated by the IMS.

I was finally able to review video for the debate on SB 91 when it was heard in the Indiana Senate on February 19 after the Senate finally updated its website today with the archived video after nearly a week's delay. The debate was relatively short given the extraordinary and unprecedented nature of what is being undertaken. Sen. Young began his presentation of SB 91, which creates the Motorsports Investment District, by stating it was not a bailout of the IMS. "The Speedway is not in trouble," he said. "They don't need any state help to continue for another 110 years or so, but they do have a project that they can't complete and they've asked that the state become a partner."

Young insisted that the legislation was not unconstitutional in reference to federal bailouts because the state wasn't picking winners or losers since the IMS is not in competition with any other motorsports facilities in the state. Yet he suggested the IMS was in competition with tracks in other parts of the country in explaining the need for improvements to be made at the track. To follow Young's logic, the IMS doesn't need state assistance, but if it doesn't receive state assistance, it won't be able to make improvements that will allow it to be competitive with other tracks. Hopefully that makes more sense to you than it did to me.

Young blamed the federal government for forcing the IMS to invest somewhere between $25 to $40 million to bring it into compliance with the ADA to accommodate disabled persons. This seems to be a floating number. The IMS in one release said those costs would be $25 million. When the bill was heard in committee, it was stated that ADA improvements would cost $10 million. I've previously discussed how the ADA compliance issue is totally bogus, notwithstanding the concocted settlement the IMS reached with U.S. Attorney Joe Hogsett as part of an orchestrated effort to massage public acceptance of such a massive public subsidy for a privately-owned business. The ADA complaint filed against the IMS was more than a decade old and seemed of no concern to the U.S. Attorney, a close friend of certain IMS officials, until its officials opened up talks with lawmakers to seek state assistance.

After venting about federal over-reach, Young then shifted his focus to the need to help the IMS regain business it has been losing. He said income and tax revenues generated by the IMS have been declining for several years due to smaller attendance at race events. The declining attendance he said is due to temperatures being too hot for the running of the Brickyard 400, and that the fans won't return unless lighting is added to allow the race to be run at night. Young said fans insist on being able to view what's happening around the track during the race, which explains the need for investment in high definition video boards to replace the existing video boards. The seating is also too uncomfortable for many fans, and it's necessary to replace current seating with more comfortable seating.

According to Young, the financial impact generated by the IMS annually is $500 million. I'm not sure how he came up with that number, but it's a nice round number. To the chagrin of IMS CEO Mark Miles, the chairman of the local Super Bowl Committee, Young insisted the IMS' financial impact was greater than the Super Bowl, which Young said actually lost money for the city. Miles in the past has claimed the Super Bowl had a $150 million net impact on the Indianapolis economy.

At one point, Young claimed the IMS spends $10 to $15 million annually to maintain its motorsports facilities. Remarkably, that's the same number the Indiana Pacers say it takes to maintain Banker's Life Fieldhouse. When Lucas Oil Stadium opened--without funding in place to pay its operating expenses--the CIB claimed it cost about $20 million to maintain. Does anyone else get the feeling that these numbers are always pulled straight out of someone's ass and have no grounding in reality?Young said the IMS plans to spend somewhere between $70 to $100 million on improvements. That's quite a variance. One would think that a more precise estimate of the cost of those improvements could be provided.

Young says the IMS is currently generating about $3 million annually in state income and sale taxes, which includes the IMS, the Brickyard Crossing golf course and two buildings adjacent to the IMS that are operated by the IndyCar Series. The Legislative Services Agency's fiscal statement on SB 91 does not break down what part of the $3 million is generated from income versus sales taxes, which should come as a surprise to noone since the IMS isn't about to open up its books for public scrutiny. As I previously observed, LSA's estimate was $3 million before SB 91 was amended to remove admissions tax revenues from the MID. That tax isn't currently collected on ticket sales at the IMS like other sporting events held at Lucas Oil Stadium and Banker's Life Fieldhouse. Before the admissions take was taken out of the bill, I noted that the admissions taxes alone could generate close to $3 million annually based on estimated attendance figures at IMS events.

The $2 million in minimal investment the IMS will supposedly contribute annually is based on LSA's current $3 million figure the IMS, golf course and IndyCar supposedly generate annually in income and sales taxes. Under SB 91, the maximum amount of state tax revenues that can be captured by the MID is $5 million. You can bet the Department of Revenue will certify a $5 million figure annually regardless of whether that amount of revenue is generated. That's been the modus operandi with the downtown sports district, which currently captures $11 million in state income and sales taxes to benefit the CIB. The only thing that's clear is that $5 million a year would not be sufficient to service debt on a $100 million bond issue, which would only be sufficient to repay principal, not interest costs.

To my surprise, Sen. Lonnie Randolph (D-East Chicago) actually raised the possibility that the track might be sold in the near future during his questioning of the bill's author. Randolph noted that the improvements could add to the value of the track and what would happen to that money. Young was not at all concerned that the IMS might be sold, or that any contingency could or should be imposed by his legislation to address that possibility. He assured Randolph that the same obligations to contribute towards the debt service on the bonds would apply to any successor owner without any increased liability on the part of the state. In Young's view, the improvements to the IMS facilities would ultimately create additional revenues for the state--even if that took 20 years before that would occur.

Sen. Greg Taylor (D-Indianapolis), a co-sponsor of SB 91 and a bond lawyer by trade, also reassured his colleagues that the City of Indianapolis would never be called upon to contribute anything towards the IMS, and that if he was still around and this occurred, he would be the first to stand up and speak out on the commitment that had been made by the IMS that no city aid would be sought by the IMS. Of course, the City of Indianapolis has always contributed considerable public safety costs each year associated with crowd control during all IMS events without any contribution from the IMS. Moreover, the City has also agreed to exempt tickets sold to IMS events from the admissions tax that applies to other sporting events.

Lafayette Newspaper Supports $100 Million IMS Giveaway But Wants Local Broadcast Blackout Lifted

The Lafayette Journal & Courier has a very poorly reasoned editorial backing the state legislative move to give $100 million to the Indianapolis Motor Speedway to make improvements to the track. Their argument: "The state has made all sorts of provisions for sporting venues in its history. Why not help the Indianapolis Motor Speedway? In terms of Indiana icons, the speedway — home of the Indianapolis 500 for more than a century — there are few that can stake claim to the same sort of staying power." Apparently the editors see no distinction between financial assistance for a publicly-owned sports facility versus a privately-owned one.

The editorial adds that it would like Indiana legislators to convince IMS officials to lift the local TV blackout of the live broadcast of the running of the Indianapolis 500, referring to it as an "archaic rule," to benefit those who don't attend the event. A re-broadcast of the race is aired locally the evening of race day in prime time. With attendance problems already haunting the IMS, lifting the local blackout rule is the last thing the IMS is going to do, but the editors at the Lafayette newspaper can dream on.

Sunday, February 24, 2013

More Indy Parking Meter Tales

I had to share with you the musings of Urban Times editor Bill Brooks in his latest column "Babblin Brooks" concerning an unexpected experience he had recently while paying to use one of the new electronic meters downtown. Bill was an unabashed supporter of Mayor Greg Ballard's 50-year lease of the parking meter assets to Ballard's pay-to-play contractor friends.
Once upon a recent time, I thought I was up-to-date on the downtown parking meter program. Silly me. One bitter-cold January morning I swiped a credit card at a meter in the 400 block of Pennsylvania Street, then--thinking that most meters had a two-hour limit--quickly hit the "maximum time" button. It was, after all, very, very cold. That's when the meter's little message board told me I had paid for 10 hours. Yikes. When did a 10-hour limit happen? I remember when, in response to merchants' concerns, ParkIndy expanded evening protocols to four-hour limits. But 10? Surely I would have noticed that, being a newsletter editor and all that. And who needs to park for 10 hours during the daytime along Pennsylvania Street?
Supposedly one of the goals of the new parking meter program was to encourage more turnover of parking spaces. I've been surprised, too, at how many of the meters downtown allow you to initially pay for more than a 2-hour time period.

Star's Erica Smith Wants Indy To Be Like Cleveland

There's nothing like aiming low. In her continued role as a paid spokesperson for IndyConnect's proposed mass transit boondoggle, Indianapolis Star columnist Erika Smith holds up Cleveland's mass transit system as a reason why we should hike our local income taxes 20% to provide initial start-up costs for a $1.3 billion, expanded metropolitan mass transit system. Someone told Smith that the dying and decaying Cleveland saw $4 billion in investment along a 9-mile stretch of a bus rapid transit line, and that's proof enough for her that Indianapolis should do the same.
RTA, Cleveland’s transit agency, estimates that a mix of public, private and nonprofit entities have invested more than $4 billion along the nine-mile stretch of Euclid Avenue, where the HealthLine runs.
“People ask me all the time was the HealthLine worth it,” said Jim Haviland, executive director of MidTown Cleveland community development corporation. “And I always say, ‘Absolutely.’ ”
In Indianapolis, it’s easy to forget that one of the biggest arguments for why we need more transit is to spur residential and commercial development in the urban core. As in Cleveland, developers long ago lost interest in inner-city neighborhoods and have been building in the suburbs. The city’s tax base has suffered as a result — and with that, schools and city services.
For years, that trend has seemed unstoppable. But with a younger generation of workers inclined to live in well-connected urban neighborhoods, there’s an opportunity for Indianapolis to reclaim residents and, with them, businesses and tax dollars . . .
But still, it’s up to cities to give residents and developers a reason to come back. And often that reason revolves around transit.
Take Cleveland, for example.
The planning for Euclid Avenue started years ago with the goal of connecting Downtown with Cleveland State University, Cleveland Clinic and University Hospitals a few miles away. City officials wanted to create an economic development corridor. Or as Haviland puts it, “a linear research park in the middle of the city.”
Transit came up immediately as a method for doing this. First rail, but then the cheaper bus rapid transit. There also are dedicated bike lanes.
The key to making it work, though, was changing the zoning code to support the new infrastructure. So now, any new buildings must be constructed set back only a few feet from Euclid Avenue with small parking lots in the rear. The city also banned standalone restaurants with drive-throughs to encourage developers to go for larger commercial projects instead.
“The idea was to bring back density,” Haviland said.
It seems to be working.
Uh, no, it's not working, Erika. Forbes magazine's latest rankings of the top 20 most miserable cities ranks Cleveland 17th, citing the fact that it has a higher exit rate than any other major city besides Detroit, which it ranks as the most miserable city in which to live. Detroit, by the way, has invested far more in mass transit than Indianapolis. Worked out real well, eh? Chicago, which has invested perhaps more than any other city in the country on mass transit ranks fourth on the Forbes list. "Chicago has passionate supporters, but residents must endure the misery of long commutes, plummeting home prices, brutal winters and high foreclosure rates," Forbes reports. "The migration rate out of Chicago is the sixth worst among the 200 largest metros."

Indianapolis is doing much better than Cleveland by any standard of measure even with its measly $65 million annually operating budget for IndyGo of which you're apparently so ashamed. Mass transit has absolutely nothing to do with spurring people to move back into the city. The largest expenditure proposed by IndyConnect is to build an extremely costly 23-mile, light rail line from downtown Indianapolis to Noblesville. That doesn't look like a plan to get people to move back into the city; it looks more like an expensive joy ride for upscale suburbanites to travel downtown to attend a Colts or Pacers game.

I had the opportunity today to join Paul Ogden, Mark Small and Matt Stone on Civil Discourse Now where we had one of the few, objective and intelligent discussions on the proposed mass transit plan that have taken place to date.

UPDATE: Fellow blogger Fred McCarthy has a good take on a story in the latest edition of the IBJ in which they're already discussing the hiring of an internationally-renowned architect to build a $17 million mass transit hub downtown, even before the legislation has been passed by the legislature and approved by voters, which cannot happen until the 2014 general election. How could you pick an architect and know how much the hub is going to cost to build this far in advance? Apparently there must be a bipartisan agreement to install an algorithm on the electronic voting machines that will assure approval of the referendum to be so confident as to discuss such plans in detail this far in advance.

Saturday, February 23, 2013

Speedway Motorsports, Inc. Filed New Credit Agreement With Lenders On February 1: Too Many Coincidences?

One of the largest motorsports facilities owners in the United States, Speedway Motorsports, Inc., filed an 8K statement with the Securities & Exchange Commission on February 1, 2013 disclosing a new credit agreement with its lenders that allowed it, among other things, to draw up to $250 million for the purpose of "aquiring additional motor speedways and related facilities", a little more than a week before the Indianapolis Star broke the news that State Sen. Mike Young (R), whose district includes the Indianapolis Motor Speedway, planned to introduce an amendment the following week to SB 91 that would provide state funding of up to $100 million for the IMS. Perhaps it's just another in a series of coincidences.

Friday, February 22, 2013

Citizens Deal Promised Savings But Instead Leads To Skyrocketing Water & Sewer Bills

Mayor Greg Ballard and Citizens Energy folks promised Indianapolis residents that Citizens Energy would be able to realize huge savings from acquiring the City's water company and wastewater treatment facilities. Citizens claimed that rate increases that were projected in future years would be cut at least by 25%, if not more, at the time it acquired the utilities and threw in an additional $500 million to the City to spend on infrastructure improvements. Instead, it doubled the pay of its CEO Carey Lykins and is now petitioning the Indiana Utility Regulatory Commission to hit Indianapolis customers with a 50% increase in sewer rates and a 10% increase in water rates. Water rates just went up 25% in 2011 and sewage rates went up over 10% last year. Both rates have more than doubled over the past decade. Citizens Action Coalition representative Kerwin Olson and Councilor Zach Adamson expressed concern to the Star over the planned rate hikes:
If the Indiana Utilities Regulatory Commission approves the request, an average monthly sewer bill of $30 would rise to $40 in January and $44 in October. An average monthly water bill of $31 would rise $3 to $34. Combined, the change represents a 28 percent increase in a customer’s water and sewer bill.
Those increases are a cause for concern, according to Kerwin Olson, executive director of Citizens Action Coalition, a consumer group.
“One of the promises Lykins made was that he would be able to deliver savings to ratepayers, and the opposite seems to be happening,” Olson said.
The most recent change to the water rate was a 25 percent increase in 2011. The last sewage rate change was a 10.75 percent increase in 2012. Both of those increases were requested by the city prior to the nearly $2 billion acquisition of the city’s water and sewer departments by Citizens . . .
Specifically, the rate increases will cover $444 million in wastewater system improvements that include constructing an underground tunnel system, expanding wastewater treatment plants and continuing a septic tank elimination program. The rate increases also would help fund nearly $114 million in water system updates to prevent water main breaks, improve system flow and enhance the water treatment plants.
To critics of Mayor Greg Ballard’s decision to sell the utilities, Thursday’s announcement was proof that the deal was a bad one.
“Fundamentally, this rate increase is directly attributable to the mayor’s decision to put infrastructure repairs on the water and sewer company’s maxed out credit card to be paid by future rate increases” said Zach Adamson, an at-large city-county councilman. “He touted a short term gain, but we are living with the long term consequences.”
Marc Lotter, a spokesman for Ballard, accused Adamson’s Democratic party of leaving the sewer and water systems in poor financial shape while they controlled the city.
“It was always anticipated and discussed that rates would have to be increased because of the billions of dollars of infrastructure improvements that are needed,” he said. “Because of the mayor’s decision to partner with Citizens Energy Group, rates are going to be 25 percent lower than they would have been otherwise. We are confident Citizens is on track to meet that goal.”
Councilor Adamson's assessment that we're now paying for the $500 million Citizens paid to the City after it agreed to assume more than $1 billion in debt accumulated by the utilities at that time is spot on. A large part of that debt was incurred after the City paid more than double what the water company was worth when it purchased it from NiSource, which bought it a few years earlier, sold off profitable assets and neglected long-term maintenance needs. The City was saddled with all of those unmet needs and then foolishly turned management of the water utility over to Veolia for an exorbitant management fee. Veolia did a terrible job managing the water utility and repeatedly faced accusations by ratepayers of over billing.

My biggest criticism of the City's deal with Citizens was the purchase price it was paying. Given the incredible amount of debt the nonprofit was assuming, there was no justification for such a high purchase price other than to give the false impression there was a $500 million windfall to be gained from its sale. I knew then that Citizens could not afford to pay that price and assume all that debt unless it raised utility rates even higher than they would need to be raised if no sale had occurred. Now ratepayers are paying the price for that $500 million imaginary windfall. See children, there really is no such a thing as a free lunch despite what Mayor Ballard promised you when he unveiled the deal in 2009.

Confirmed: Indianapolis Motor Speedway Is On The Auction Block

I told you earlier this week that sources indicated that a sale of the Indianapolis Motor Speedway by the Hulman-George family has been in the works for some time. Mari Hulman-George, heir of the late Tony Hulman, along with her three daughters, all of whom sit on Hulman & Company's board of directors, decided it's time to unload the race track her late father brought to international fame. According to a well-placed source, Tony George, grandson of Hulman, is part of an outside group of investors in negotiations to buy the IMS.

Mari and her daughters decided to oust Tony George from his role as IMS CEO in 2009 following the Formula One debacle that reportedly cost the IMS more than $150 million and as family members grew increasingly concerned Tony was squandering their inheritance. Last year, Tony resigned from Hulman & Company's board of directors, his last remaining role within the family fortune, following reports that he and an outside group were attempting to wrestle control of the IndyCar series away from the IMS. Then-IMS CEO Jeff Belskus claimed that George agreed to resign due his conflict of interest. Belskus emphasized at the time that the IndyCar series was not for sale and no offers of sale were under consideration.

What Belskus did not disclose was the fact that the Hulman-George family members had already made up their minds to unload the IMS and were working behind closed doors with Indiana legislators on a plan to capture up to $100 million in state funding for improvements to the IMS in an effort to enhance the value of the IMS to a potential suitor. George's departure from the board of directors gave him a green light to form an outside group of investors to acquire the IMS. The family then brought in Mark Miles, the former head of the Central Indiana Corporate Partnership and chairman of last year's Super Bowl Committee, to step into a new role as IMS' CEO replacing Belskus, who remained with the IMS in a reduced capacity.

The source says Miles was fully aware of the planned sale of the IMS when he was brought aboard as its CEO last fall, and even Indiana's top lawmakers knew of the planned sale but agreed to hold that information close to the vest to avoid any risk of upsetting a taxpayer-financed buyout of the IMS they had already agreed to back before the convening of this year's legislative session with no public debate.

Essentially, Indiana taxpayers are being taken for a ride as part of a deal to provide Hulman-George family members with a sweetheart buyout deal of the IMS financed on the backs of taxpayers. The $100 million cash infusion ensures the buyout group led by Tony George that it will have free money to remake the IMS in their own vision. The rich get richer, and the poor get poorer.

UPDATE: IMS's spokesman Doug Boles denies there are any plans to sell the IMS according to Jalopnik. Of course, the IMS couldn't acknowledge that was their intention even if it was. If I were the lawmakers so anxious to pass this $100 million giveaway, I would at least include language in SB 91 conditioning the state's participation on that commitment by the IMS. It's just a hunch, but I'm pretty sure the IMS won't agree to that term.  

Thursday, February 21, 2013

Star Wakes Up: Reports On IMS' Influence Peddling To Buy Votes For Its $100 Million State Giveway

The Indianapolis Star, after spending the last two weeks acting as the number one cheerleader for the Indianapolis Motor Speedway and its owners' request to raid the state treasury to the tune of $100 million, has finally awakened to the fact that it has to put on some semblance of being a legitimate newspaper. Lo and behold, one of its reporters discovers what I've been telling you from day one: The IMS carefully began buying influence with lawmakers before unveiling its raid of taxpayer dollars just two weeks ago, which has already successfully cleared the Indiana Senate by an overwhelming margin. Alex Campbell reports:

Coats Gets It On Hagel: Calls On Obama To Withdraw Nomination

Perhaps no other individual as conspicuously unqualified to serve as Secretary of Defense has been nominated by a President in modern times than former Nebraska Sen. Dan Hagel. Fortunately, Indiana's senior Sen. Dan Coats gets it and won't be bullied into backing him by the Obama-loving media. His office released this statement on why Coats, along with 14 other senators, are calling on President Obama to withdraw Hagel's nomination.
Senator Dan Coats (R-Ind.) today joined a group of 14 other senators and called on President Obama to withdraw the nomination of former Senator Chuck Hagel (R-Neb.) to be Secretary of Defense.
Along with Coats, the letter to the president was signed by Senators John Cornyn (R-Texas), Jim Inhofe (R-Okla.), Lindsey Graham (R-S.C.), Roger Wicker (R-Miss.), David Vitter (R-La.), Ted Cruz (R-Texas), Mike Lee (R-Utah), Pat Toomey (R-Pa.), Marco Rubio (R-Fla.), Ron Johnson (R-Wis.), Jim Risch (R-Idaho), John Barrasso (R-Wyo.), Tom Coburn (R-Okla.) and Tim Scott (R-S.C.).
In their letter, the senators write, In their letter, the senators write, “Regarding U.S. policy on Iran's pursuit of nuclear weapons, Senator Hagel displayed a seeming ambivalence about whether containment or prevention is the best approach, which gives us great concern. Any sound strategy on Iran must be underpinned by the highly credible threat of U.S. military force, and there is broad bipartisan agreement on that point. If Senator Hagel becomes Secretary of Defense, the military option will have near zero credibility. This sends a dangerous message to the regime in Tehran, as it seeks to obtain the means necessary to harm both the United States and Israel. 
“We have concluded that Senator Hagel is not the right candidate to hold the office of Secretary of Defense, and we respectfully request that you withdraw his nomination.”

Ballard Gleeful That Indy Motorists Pay Five Times More For Metered Parking Spaces

Mayor Greg Ballard is so excited he just can't hide it. He was boasting to media folks today that his privatization of Indianapolis' parking meter assets has netted city coffers $2.5 million, up from the $339,000 the City netted on parking meter revenues of $1.3 million in 2010. But the windfall for the pay-to-play contractors who won the 50-year deal to operate the City's parking meter assets dwarfed the City's gain. The ParkIndy private consortium pocketed $5.3 million or 70% of the $7.7 million collected in parking meter revenues. Here's Ballard's take on today's news.
These numbers provide further proof that Indianapolis’ parking meter modernization plan was a good move for the city and its citizens,” Ballard said in a news release. “Our city gains more revenue to fund much-needed improvements and building projects in metered parking areas, and motorists benefit from new technology that makes it easier to pay and easier to park in our city.
It's unclear how the Mayor sees today's news as good news for Indianapolis residents. The City's small revenue gain and the private operator's large windfall comes at the expense of city residents and visitors, who are shelling out five times more to park at the City's metered parking spaces than they were pre-privatization. That's mostly attributable to doubled parking meter rates that jumped from .75 cents an hour to $1.50, and expanded hours of operation for parking meters to include evenings and weekends at many metered spaces in downtown and Broad Ripple. ParkIndy collected a staggering $2.1 million in parking fines from motorists compared to the $5.3 million it collected from parking meter fares. Nearly $300,000 came from fees collected for permits and meter closings.

A little-discussed provision of the parking meter deal, which was  awarded to the consortium led by ACS, a politically-connected law firm client of then-Council President Ryan Vaughn (now Deputy Mayor), was a doubling of fines for parking meter violations to $20. The fines are administered by ParkIndy, which provides financial incentives to its so-called "parking ambassadors" to issue as many fines as possible. Some motorists complain that they have been issued three to four parking violations for an expired meter on the same day. Mayor Ballard vetoed an ordinance passed by the City-County Council which would have outlawed the practice of issuing multiple $20 tickets to a motorist for the same parking violation. Many motorists have also complained that parking ambassadors are issuing them tickets when the newly-installed electronic meters still show unexpired time for their parking space. Rumors have circulated that some parking ambassadors are committing fraud on motorists simply to earn incentive income from their employer.

Mayor Ballard boasts that the additional revenues are helping the City pay for "much-needed improvements and building projects." In reality, the money is simply going into a slush fund the Mayor has been using to pass out to his favorite pay-to-play contractors to finance their private development projects. Ballard awarded the first money earned from the privatization to Ersal Ozdemir's Keystone Construction to build a mixed use, parking garage project in Broad Ripple. Ozdemir is one of Ballard's largest campaign contributors, has accompanied the Mayor and his wife on overseas junkets and boasts of frequents visits to the 25th floor offices of the Mayor to provide advice to him. Ozdemir hired Ballard's first chief of staff, Paul Okeson, in a high-paid executive position with his firm, who has not shied away from using his access to the Mayor's office to win sweetheart deals for Ozdemir's firm. The City could have garnered additional revenues and without hitting Indianapolis residents as hard in the pocketbook simply by installing new electronic meters and operating them itself like scores of other cities have done to bolster local revenues.

Ballard Cancels India Junket Due To Terrorist Attacks

Terrorists set off two bombs in a crowded marketplace in the city of Hyderabad, India where Mayor Greg Ballard was scheduled to depart tomorrow on his latest overseas junket. In the wake of the deadly explosion that killed at least 11 and injured dozens more, Ballard has decided to cancel the trip. His office just released the following statement:
The thoughts and prayers of Indianapolis are with the residents of our Sister City of Hyderabad following the deadly explosions that occurred earlier today.  I was greatly looking forward to renewing our relationships in this wonderful city next week.  However, the government, civic and business leaders we were scheduled to meet should entirely be focused on dealing with the tragedy at hand.  We will look to reschedule this trip at another time.
News reports say the bombs were attached to two bicycles. Hyderabad, a city of 10 million, is the center of India's IT industry. It has a mixed population of Hindus and Muslims.

Self-Dealing Lawmaker Carves Out Exemption For Himself From Tax Increase To Support Mass Transit

You may recall serious questions being raised about how an old school building purchased by State Rep. Eric Turner's family just happened to be chosen to serve as a call center to serve the Family & Social Service Administration's welfare clients under a controversial welfare privatization plan that Turner helped usher through the state legislature. You may also recall that Marion Co. taxpayers were put on the hook to finance a new nursing home for a Turner family-owned business on Indianapolis' east side. It looks like Turner is up to his old habits of helping himself out again in his official capacity.

The Republican leadership in the House of Representatives of which Turner is a part is seeking to impose a new local income tax on Marion County and surrounding counties that are considered a part of the metropolitan area of Indianapolis to finance a multi-billion dollar regional mass transit plan under HB 1011. Turner's Hamilton County could become a part of the new mass transit taxing district if local approval is obtained. Yet Turner is leaving nothing to chance for himself. Turner offered a second reading amendment to HB 1011 yesterday, which was adopted on a voice vote, that would allow certain border townships to opt out of the mass transit taxing district altogether. This would include the border township in which Turner resides in the town of Cicero within Hamilton County's Jackson Township on the bordering county of Howard. Turner said the $1.3 billion dollar plan will have a greater likelihood of success if areas like his home area are exempt from the tax.

Interestingly, the most expensive component of the proposed mass transit system is a new light rail line that would be built from downtown Indianapolis all the way to Noblesville, which is in the township next door to Turner's Jackson Township. So if the taxes are imposed on all of the rest of us within the mass transit district, Turner, a millionaire businessman, would be able to take a short six-mile drive down to Noblesville and catch the train down to Indianapolis without paying the higher income taxes all the rest of us would be forced to pay. Don't you just love it. Turner can use his political muscle at the State House to build up his family's business empire at the same time he exempts himself from paying the same taxes he expects you and I to pay. Let's face it. Folks in downtown Indianapolis aren't going to be using that billion-dollar train to Nobleville. It's being built for the benefit of the residents of Hamilton County who might choose to take the train down to the State Fair or a Colts game. If anyone should be exempt from paying the mass transit tax, it should be the people living in downtown Indianapolis. We've already been paying tens of millions of dollars a year in property taxes to support a bus system most people refuse to ride.

Pence Turns To Public For Tax Cut Support After Republican Lawmakers Turn Their Backs On Him

Gov. Mike Pence is learning the hard way that having super majorities in the Indiana General Assembly doesn't mean a whole lot when most of the Republicans in the legislature are RINOs. Pence is now having to appeal to the public to support his proposed 10% cut in state income taxes after Republican lawmakers pretty much told him to buzz off. They say they have more pressing priorities than helping ordinary taxpayers, like raising income taxes to finance a multi-billion dollar boondoggle of a mass transit plan for Central Indiana and giving $100 million to the Hulman family to spend on their race track in consideration for the campaign contributions and free tickets being put in their pockets. The South Bend Tribune reports on Pence's plea on behalf of taxpayers:
His desire to trim Indiana's income tax rate from 3.4 percent to 3.06 percent -- a 10 percent drop -- figured prominently in his message.
"I'm someone that believes government should collect only what it needs," he said. "And when government collects more than it needs, I think it should return that to the hard-working taxpayers who earned it in the first place." 
Pence said the tax relief would help Indiana residents and small-business owners at a time when federal tax rates have risen.
"When you lower the personal income tax rate, it's also the best way to lower taxes on job creators," he said.
"Most statistics show that more than 90 percent of business enterprises in the state of Indiana don't file their taxes under the corporate tax rate; they file their taxes under the personal income tax rate," he continued. "If you want to lower taxes on job creators, lower the personal income tax rate so small businesses can hire more employees and purchase new equipment and grow."
Pence said the tax cut would also make Indiana "the lowest-tax state in the Midwest," according to the Tax Foundation.
"We might just have to put that on all the billboards facing out," he said.
It hasn't been easy, however, for the new governor to sell his tax plan to the General Assembly, even though Republicans hold large majorities in both the House of Representatives and the Senate. 
Neither the House nor the Senate has advanced budget proposals that include the tax cut during this year's legislative session.
The Tribune notes that Indiana is currently running a more than $2 billion surplus. Pence's tax cut would reduce annual revenues by about $500 million a year.

Bob Kravitz Schools Colin Cowherd On Indianapolis' Supposed Racism

I've been pondering how to react to Colin Cowherd's unloading on Hoosiers for being racists because either they lack the disposable dollars to spend on Pacers tickets because of the worst economic downturn since the Great Depression, or they've simply lost their enthusiasm for the Pacers and the NBA in general. The Star's Bob Kravitz, perhaps the only decent columnist still employed by the Star, does a decent job putting Cowherd in his place today.

Perhaps you missed it, Cowherd, an ESPN talk show host, went off on Indianapolis residents earlier this week for being a bunch of racists because attendance at Pacers game is so low. "There's no other explanation why people don't go to Pacers games," Cowherd said. "What we're saying is Indianapolis punishes the Pacers more than they punish the Colts for indiscretions off the field or off the court, and a lot of that is racial." Here's Kravitz' opening response to Cowherd's cow pile:
This was in 1999-2000, back before Indianapolis became a racist town. The Indiana Pacers, playing their first season at Conseco Fieldhouse, sold out every game.
This was in 2004-05, the season of The Brawl, but still well before Indy turned virulently racist. The Pacers averaged 16,994 fans per game and had more than 13,000 full season ticket holders or season-ticket-holder equivalents.
This was in 2008, before Indy’s latent, simmering racism reared its ugly head. The city, and the state, helped elect Barack Obama to the presidency of the United States, the first time Indiana had gone for a Democratic presidential nominee in decades.
Since then, we’ve become a bunch of hood-wearing, cross-burning racists who simply won’t show up to Pacers games because we don’t like black people. Or so it has been suggested by Colin Cowherd, an ESPN talk-show host who is generally the smartest guy out there and has always been extraordinarily kind to me. (So I’ll repay his kindness by trashing his argument. Shows you what kind of guy I am.) . . .
Kravitz then goes on to recount the Pacers sordid history. Missing from his analysis, however, is the $43.5 million Indianapolis taxpayers have been forced to subsidize the team at the expense of public safety and other more deserving public expenditures over the past four years because the team's billionaire owner claims the franchise is bleeding tens of millions of dollars annually. I could add that Indianapolis has also elected an African-American to represent it in Congress since 1996, but I digress.

There must be something in the water they're drinking at ESPN to cause these delusional rants. Last December, ESPN analyst Rob Parker went off on Washington Redskins quarterback Robert Griffin, III for being a cornball brother because he had a white girlfriend and was rumored to be a Republican. It's fascinating how silent the mainstream media has been after one its favorite leftist NBC stars, Alec Baldwin, allegedly went on a racist rant against a photographer for the New York Post, calling him a coon, a drug dealer and a crackhead for no other apparent reason than he's black.

Tuesday, February 19, 2013

Idiot Mayor Still Stuck On Stupid

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I had to share with you a couple of clips from our esteemed Mayor's latest Night Out in Decatur Township. In this first clip, hear Ballard explain how we must raise local income taxes 20% to fund a multi-billion dollar metropolitan mass transit system. He says 81% of young people insist on having mass transit as a condition to living in our community; otherwise, they will choose to live somewhere else. He then shows a slide claiming that a rail line in Charlotte, North Carolina generated $1.5 billion in investment along the rail's route. That's a lot of potential property tax dollars that will be generated Ballard claimed, if we similarly build a billion dollar, 23-mile light rail line from Noblesville to downtown Indianapolis, which he never mentioned to his audience would have no benefit to the residents who live in Decatur Township. He also didn't tell his audience that all of the property tax revenues generated from those newly-developed areas along the rail line would be captured by a newly-created TIF district and reinvested in the metropolitan transit district that will continue to levy property taxes on all Marion County property taxpayers just like IndyGO, except it will be governed by an unelected regional transit board accountable to nobody other than the politicians who reward them with their appointments.

Ballard still hasn't explained to the public what he did with the revenues from the 2007 public safety tax increase that hiked local income taxes 65%, or about $90 million a year. We now have 200 fewer police officers than we had when he took office in 2008. And he wants us to believe that raising taxes and spending billions more on mass transit for areas with even less population density than currently served by IndyGo's bus system will get better results than we're currently getting from the poorly-run IndyGo system.

In the second clip, Mayor Ballard is asked why the City is spending hundreds of thousands of dollars on a lawsuit fighting the development of a privately-owned parking facility in Ameriplex, which would generate much-needed property tax revenues for cash-strapped local governmental units and schools in Decatur Township. Ballard's response is that the Airport Authority has a billion dollars in debt from building a new airport terminal and it might default on its bonds if, God forbid, private development occurs in the area surrounding the airport that might benefit the community at large and allow airport passengers to park at a facility that is cheaper than the excessive parking rates charged by the airport's parking lots. This guy is such a clown and an embarrassment.

Indiana Senate Thumbs Nose At Indiana Constitution: Votes $100 Million Public Treasury Raid To Benefit Hulman-Owned Indianapolis Motor Speedway

State Bailout First Step In Plan By Hulman Family To Sell The IMS To Out-Of-State Interests
The vast majority of members of the Indiana Senate violated the oath of office they took to uphold the Indiana Constitution when they were sworn into office. By a vote of 37-12, the Indiana Senate voted today to raid the state treasury to give $100 million to the Hulman-owned Indianapolis Motor Speedway to make improvements to the race track and surrounding properties, including a golf course and possibly even the construction of a new hotel adjacent to the track. The provision of the Indiana Constitution that clearly prohibits the action taken by SB 91, authored by Sen. Mike Young, can be found in Article 11, Section 12. It expressly prohibits the state from giving or lending the state's credit "in aid of any person, association or corporation." SB 91 clearly violates the constitution by illegally taking up to $5 million in state revenues annually and giving the money directly to aid the Hulman family to spend as they please on their privately-owned race track.

Monday, February 18, 2013

IBJ's Story Claiming IMS Is Losing Out To Other Race Tracks Is Total Fiction

The IBJ's Anthony Schoettle penned an editorial masquerading as a news story in the latest edition of the business publication making the case that Indiana taxpayers should be compelled to give up to $100 million in public funds to the Hulman-owned Indianapolis Motor Speedway. According to Schoettle's misleading story, the IMS has been "left in the dust" by other U.S. race tracks, claiming the largest race track in the world ranks "in the lower half among U.S. tracks in terms of amenities." Without substantiation, Schoettle cites so-called experts as claiming the IMS "has not had anywhere near the level of investment expected by fans at other facilities like Daytona, Charlotte and Las Vegas." Apparently Schoettle never bothered to read archived stories he and his fellow reporters have written in the past about investments the Hulman family has made in improvements to the IMS over the past 15 years that easily exceed the $100 million that Speedway officials now claim they must make at the track to keep it competitive with other tracks.

Sunday, February 17, 2013

Carmel Mayor Spent $52,000 On Travel Over Past 5 Years

A couple of months back, Advance Indiana told you about Carmel city attorney Doug Haney spending more than $17,000 on out-of-state travel last year. It turns out that his boss Mayor James Brainard isn't shy about spending taxpayer money on travel either. Mayor Brainard spent about $52,000 on out-of-state travel over the past five years according to a report by Current In Carmel's Robert Annis. Despite his costly travel expenses, many of Brainard's trips are paid for by outside groups.

Brainard's travels have taken him to far away places like England, Qatar and Saudi Arabia. His most expensive taxpayer-funded trip was his week-long trip last year to England where he personally met with representatives of 60 different companies according to Annis, which cost $5,022. Many of Brainard's trips are taken as part of his role as a trustee for the U.S. Council of Mayors. Others trips are taken to sell outsiders on the "Carmel brand" he tells Annis. He says he's in high demand as a speaker because of the success Carmel has enjoyed under his leadership.

Brainard most frequently travels to Washington, D.C. in search of federal dollars for his affluent community. Brainard tells Annis that he has been successful in helping secure $24 million in federal grants for Carmel over the past five years, including new equipment for the police and fire department, high-efficiency LED streetlights and funding for roads and trails. Brainard tells Annis that during one meeting with a federal highway official he learned that Carmel could get 100% funding for its roundabout projects instead of the typical 80% funding because of their supposed environmental benefit. He said city officials had not been taking advantage of the more favorable funding formula until he took that information back to them.

Regardless of whether Brainard's travels are truly beneficial to Carmel taxpayers, I'll hand it to him for at least having his talking points down justifying his extensive travels better than Indianapolis Mayor Greg Ballard, who becomes extremely defensive and unintelligible when someone asks him about all the time and money he spends traveling outside the city.

Saturday, February 16, 2013

Ballard Leaves Next Week On 8th Overseas Junket

Mayor Greg Ballard and his wife Winnie will head overseas on the eighth such junket he's taken since becoming Indianapolis mayor in 2008, wasted trips that he bills as trade missions. In reality, these trips are nothing more than an opportunity for Ballard to shake down pay-to-play contractors to finance free vacations for him and Winnie at which they can tag along and obtain face time to hock their latest schemes to tap into the city's treasury to line their own pockets out of public view. Pay-to-play contractors agree to launder money to finance these trips through Develop Indy and, in exchange, they are allowed to accompany the mayor on the overseas junkets. The IBJ's Kathleen McLaughlin has a story on Ballard's latest trip to India on February 22 in which she does her best job to put lipstick on a pig.

Senate Removes Local Tax Revenues From $100 Million Subsidy For IMS

Apparently the sponsors of SB 91, the legislation that creates a new motorsports investment district (MID) that will capture tax revenues generated by the Indianapolis Motor Speedway to fund up to $100 million in improvements to the Hulman-owned race track, decided imposing an admissions tax on tickets to events held at the IMS like the 10% tax now collected on tickets to Colts and Pacers games, or capturing local income taxes, was not such a good idea. Both tax revenue sources have been removed from the legislation as approved by the Senate Appropriations Committee this past week. Despite the removal of those two significant tax sources, LSA's fiscal note for the bill contains the same initial annual revenue impact of $3 to $4 million as it stated in the original fiscal note when the local taxes were included, which is a pretty good indication that the analysis is essentially useless. Local sales tax revenues are still included in the legislation, but the fiscal note still doesn't state what the local impact will be from the loss of those revenues.

That's not all. The amended bill also expands the area covered by the MID from just the track to include "adjacent property related to the operation of the qualified motorsports facility, and owned by the owners of the qualified sports facility." The Hulmans must have been concerned it wouldn't allow them to spend the public's money on its golf course, parking lots and other adjacent property it owns around the IMS. There's been some talk of building a hotel adjacent to the IMS to replace the former 96-room motel the Hulmans operated next to the IMS for many years but closed and demolished in 2009. The taxpayers will probably wind up paying to build that, too, if that comes to fruition.

Council Ethics Committee Postpones Action On Truth In Gift Reporting Ordinance

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City-County Councilor Brian Mahern has a very sensible proposal to amend the gift-reporting requirement for City-County Council members under the city's ethics code to provide a slightly more transparent reporting of gifts council members receive from persons and entities doing business or seeking to do business  with the city or seeking to influence a council action. There are many holes in the current gift-reporting law, some of which Mahern's proposal address and many of which it does not address.  Sadly, the Council's Ethics Committee saw fit to delay action on Mahern's bill because the Council's leadership and most of its members simply don't want to provide more disclosure of gifts than they are currently required for obvious reasons.

There are major weaknesses in the current law, not the least of which is its narrow application. Individuals and businesses are permitted to make gifts to councilors that are never subject to reporting regardless of their value if they are not currently doing business or seeking to do business with the city, or currently seeking to influence council action. A gift valued at less than $100 is exempt from disclosure unless a person or entity makes several gifts below the reporting threshold totaling at least $250 in a calendar year. Thus, a lobbyist or someone doing business with the city could take a council member to St. Elmo's to three separate dinners during a calendar year costing $249.00 and not be required to disclose those gifts. A council member could be gifted a ticket to a Colts or Pacers game on two different occasions with a value of $120 each and not be subject to the reporting requirement. Moreover, any gifts provided to the council member's spouse or children is not reportable. So in the examples provided above, if a spouse or child of the councilor who accompanied the councilor to dinner or a Colts game, the value of their meals and tickets would not trigger the disclosure requirement.

Perhaps the largest single source of gifting to council members is currently exempt from disclosure. That includes gifts made by other governmental entities, and in particular, the Capital Improvement Board. The CIB and the Mayor's Office are furnished suites in which to entertain at both Lucas Oil Stadium and Banker's Life Fieldhouse under the terms of the lease agreements with the Colts and Pacers. Additionally, the CIB and the Mayor's Office have a block of tickets to every game held in those facilities. Council members are not required to report gifts from the Mayor's office, the CIB or any other governmental entity regardless of value. Any gift a council member accepts from the CIB, the Health & Hospital Corporation, the Indianapolis/Marion Co. Library or IndyGo are exempt.

Interestingly, if council members are taken on a trip related to economic development activities or government-related purpose, which could be valued in the many hundreds, if not more than a thousand dollars, the value of that trip need not be disclosed. This allows the pay-to-play contractors, for example, to launder gifts to council members through Develop Indy, for example, to avoid triggering disclosure of a gift under the city's ethics code. Moreover, any reportable gift required to be reported under current law need only be itemized identifying the source on the council member's annual financial disclosure form; the value of the gift does not have to be disclosed. The public only knows that the council member received a gift of at least $100 or more, or several gifts totalling $250 or more from a source that requires disclosure under the law.

Councilor Mahern's Proposal 28 would take some baby steps in the right direction in providing more disclosure. Yet it's more than the most corrupt city council in the state of Indiana can swallow. Mahern's proposal would include gifts made to a councilor's spouse or children as reportable gifts. It would also require a council member to report gifts from other governmental entities, including municipal corporations like the CIB. Frankly, I think the disclosure thresholds provided under the current law are too high and exempt far too many gifts of substantial value. I also don't think it should only apply to those currently doing or seeking business with the city or seeking to influence a council decision, and it certainly shouldn't exempt economic development-related trips council members accept. Perhaps that's why the majority of the council members are so anxious to pass out hundreds of millions of our tax dollars to private developers.

The bottom line is that almost all council members are currently pocketing several thousand dollars a year in gifts, at a minimum, that you know nothing about. I've previously reported that I believe Mayor Greg Ballard and his family have accepted gifts of value since he became mayor that at least equal, if not exceed, the salary he earns from supposedly serving all the citizens of Indianapolis. I provide the video of the Ethics Committee meeting so you can watch for yourself how squeamish these guys get when you start talking about reporting all the freebies they get to pocket simply because they're on the council. Pay particular interest to Councilor Leroy Simpson's comments about Mahern's proposal not being vetted or his worry that council members might be held accountable for misreporting gifts and their amounts if Councilor Mahern's proposal is adopted. I don't recall similar concerns being voiced when Councilor Simpson and his Democratic colleagues rammed through a $3.5 million spending bill to benefit a grocery store development in record time. Naturally, nobody from the Indianapolis Star or other media covered the meeting. Nothing to see here, move along.

Jackson And Wife Plead Guilty To Federal Charges

Jesse Jackson, Jr. recently resigned his seat in Congress representing a Chicago area district, and his wife, Sandi, resigned her seat on the Chicago city council after a federal investigation targeted both of them for misusing campaign funds. According to their attorneys, former Rep. Jackson is pleading guilty to wire fraud, mail fraud and false statement charges over the use of $750,000 in campaign funds for personal use, and Sandi is pleading guilty to one count of filing false tax returns, both of which were formally filed against the couple yesterday. He faces up to five years in prison and a fine of $250,000, while she faces up to three years in prison and a fine of $250,000. The Jackson's old nemesis, President Barack Obama, just happened to be in Chicago yesterday to give another phony emotional speech aimed as part of his goal of taking away all Americans' Second Amendment right to own firearms as the federal charges were officially announced. The Jacksons learned the hard way that Barry will never shy away from using the power of government to destroy anyone he views as a political enemy.

Jury Awards Partial Victory To Marsh Grocery Against Its Former CEO

The federal civil trial Marsh Grocery brought against its former CEO and namesake, Don Marsh, for breach of contract and fraud to recover millions of dollars it claimed he ripped off the company by charging the company for extravagant personal expenses over a period of years before the company was sold to its hedge fund owner, Sun Capital, ended last night with a partial victory for the company against its former CEO. The jury found Marsh liable to his former employer for $2.2 million, which was far less than the $7 million the company sought to recover from him. According to the Star, the jury found the company was equally responsible for the harm it had suffered and denied the company's request for punitive damages, and it denied the company's request that Marsh be held liable for punitive damages.

This is one of those civil cases where neither side winds up winning much of anything by taking it to trial other than the attorneys who are a few million dollars richer from all of the legal bills paid by their respective clients. Both sides would have been better off if they had reached a settlement long ago without taking the case to trial. The Star story doesn't say anything about whether the verdict requires Don Marsh to pay the attorney fees of his former employer, which had already been required to pay back a several million dollar penalty to the IRS for improper expenses for which it had reimbursed Marsh. An earlier IBJ story pegged the amount of disallowed deductions taken by the company at $5.3 million. Judge Sarah Evans Barker still has to rule on whether the company has to pay Marsh $2 million in severance payments it withheld from him after being dismissed as the company's CEO, or whether he should be asked to repay the $2 million already paid out to him. I'm assuming Judge Barker's ruling will also rule on whether one side is required to pay attorney's fees to the other side.

UPDATE: An IBJ story provides a little more detailed explanation of the jury's verdict:
After a two-week civil trial, jury members found Marsh, 75, had commited breach of contract and fraud, but stopped short of delivering Marsh Supermarkets a total victory. Although the grocery chain had asked for $1.6 million to cover expenses and penalties related to an IRS audit that focused on Don Marsh's expenses, the jury awarded the company half that amount, saying it shared responsibility . . .
The jury agreed with four of Marsh Supermarkets' eight breach-of-contract claims, ordering him to repay $1.4 million in unauthorized expenses. It did not award punitive damages.
Marsh Supermarkets was asking its former CEO for a total of about $5.6 million.
Judge Barker will rule separately on whether the company can recover the $2.2 million in severance it paid to Marsh.

Friday, February 15, 2013

Another Botched Public Corruption Case: Paul Bateman Co-Defendant Acquitted of Defrauding Physician Out of $1.7 Million

The U.S. Attorney's Office for the Southern District of Indiana didn't want to be outdone by the U.S. Attorney's Office in the Northern District Indiana, where last week John Bales and his business partner, William Spencer, were found not guilty of defrauding the state while serving as the state's exclusive real estate leasing agent after federal prosecutors failed to call a key witness, co-conspirator Paul Page, who had already pleaded guilty to wire fraud charges. This week Manuel Gonzales was found not guilty of defrauding an Indianapolis physician out of $1.7 million in a federal courtroom in Indianapolis despite the fact that his two co-defendants, former Indianapolis City-County Councilor Paul Bateman and Michael Russell had pleaded guilty to taking money from Dr. Arthur Sumrall to invest in their nonprofit foundation and instead went on a shopping spree buying vehicles, clothing and other luxury items for themselves. The IBJ's Cory Schouten covers this latest botched public corruption case:
. . . During the trial, Theodore J. Minch, a public defender representing Gonzalez, argued his client was only following orders from Russell and Bateman when he orchestrated bank withdrawals and cut checks on behalf of The Russell Foundation, the not-for-profit the ethanol business was supposed to support.
The organization spent large sums of money on cars for its employees, on office furnishings including big-screen televisions from Best Buy, and on "pre-operational bonuses" in the $10,000 to $20,000 range for its principals, Bateman testified during the trial. But there was no indication the foundation spent a dime on its stated mission of alleviating poverty.
In testimony that turned emotional at times, Bateman said he gradually came to realize what he had done was wrong and accepted a plea deal to make peace. In exchange for cooperation, the government agreed to recommend a prison sentence of 30 to 37 months for Bateman, who otherwise would have faced up to six years.
Bateman, Russell and Gonzalez still are facing a civil suit in Marion County brought by Dr. Sumrall, who is seeking unspecified damages.
Apparently, Gonzalez' lame Sgt. Schultz defense that he didn't know why they were buying all those luxury items for themselves with checks he personally processed using Dr. Sumrall's money was more convincing to the jury than the case federal prosecutors presented to them of his guilt.

More Than 500 Injured, Buildings Damaged From Meteor Strike In Russia

A automobile's dash cam captures the approaching meteor as it explodes in the Russian sky earlier today.
Amateur video capturing the scene on the ground near the time of the impact.

Without any prior warnings from the government of its arrival, a meteorite entered the Earth's atmosphere and exploded in the Ural Mountain region of Russia near Chelyabinsk, causing a sonic boom and explosion that damaged buildings and injured more than 500 persons. According to Russian officials, the meteorite weighed about 10 tons when it entered the Earth's atmosphere. At least three debris sites have been identified and a crater six meters in diameter was found at one of the impact sites. At last 20,000 rescue workers have been deployed to the affected region. Unconfirmed reports claim a Russian air defense unit intercepted the meteor, blowing the meteor to pieces at an altitude of 20 kilometers

NASA has alerted the American public to a large meteor that will make a dangerously close pass by the Earth later today. NASA will begin live streaming video today before the asteroid passes by the Earth at 2:25 p.m. today within 17,000 miles of Earth. That rock is said to be the size of half of a football field.

Thursday, February 14, 2013

Cincy's Budget-Busting Mass Transit A Warning Sign Of What Indianapolis Will Face

Mayor Greg Ballard and the scheming self-dealers pushing a multi-billion dollar metropolitan mass transit boondoggle for Naptown could care less how much taxes will have to be raised in the future after their initial 20% increase in local income taxes proves insufficient to pay debt service, let alone operate the system. They're only concerned about the big money to be made by the pay-to-play contractors and consultants waiting in line to cash in and provide kickbacks to the corrupt pols for the fleecing of the area's taxpayers. Assuming there are a few honest lawmakers left in the Indiana General Assembly, although I'm frankly hitting a lot of dry holes, they should take a look at our neighbors to the southeast in Cincinnati, who have experienced one financial disaster after another when it comes to funding mass transit in the Queen City.

Cincinnati's latest foray into mass transit is a plan to construct a street car tracks and stations running from the downtown riverfront to Over-the-Rhine. When city officials were joined by Transportation Secretary Ray Lahood for a ground-breaking ceremony for the new street car route, the anticipated budget for the project was suppose to cost $110 million, but bid results have pushed the tab to at least $130 million and could reach as high as $145 million. That's just for the first phase to build a 3.6 mile long track! The proponents of Indianapolis' mass transit system claim they can build a 23-mile light rail system that stretches from downtown Indianapolis to Noblesville for a meager $650 million on what they describe as a fiscally-conservative overall budget of $1.3 billion that includes expanded bus service as well. Fat chance. Red-faced officials in Cincinnati are now discussing options to cut the costs, including tossing all the bids and rebidding the project and altering the proposal.

You have to check out this feel good video city officials put out touting how Phase 1 of this street car plan was going to generate $1.4 billion in economic development for Cincinnati. The talking points being used by the same people here in Indianapolis who are being paid with our federal tax dollars to sell Indiana lawmakers on a new mass transit system are nearly identical to what the clowns in Cincinnati used. Listen to Mayor Mark Mallory assure his city's taxpayers that nobody's taxes will have to be raised to finance the city's mass transit plan. Like Obama, he thinks money just falls from the sky and that any money spent by government is really just a small investment upon which there will always be a far greater return. Obviously their city's leadership hasn't progressed much from the days when Jerry Springer served as the city's mayor before his prostitution bust led him to a career in daytime trash television.

UPDATE: Here's an interview with Indianapolis' idiot Mayor Greg Ballard with WISH-TV where he claims all the 20-something year olds no longer want to drive a car so we have to spend billions on mass transit to accommodate them. Ballard is also accepting free trips around the world for he and his wife Winnie, shopping sprees and whatever else you have of value to offer him and his family. He's got lots of public tax dollars he's just itching to pass out. If you've got something for him and his wife, he's got plenty he's willing to hand over to you. To our friends in Chicago, come on down to Indy where our public officials will hand you hundreds of millions of dollars as long as you're stuffing money in their pockets and where you don't have to worry about a pesky prosecutor looking over your shoulders. It's all kosher here. Better yet, the news media here will pat you on the back for plying your corrupt trade as long as you're putting money in their pockets as well. Hat tip to the readers who pointed this classic interview of our corrupt mayor.