Ballard Administration Tapped Downtown TIF Fund For Nearly $1.6 Million To Pay Consultants For Justice Center Project

Advance Indiana has learned City-County Council members were just informed by the Indianapolis city controller's office that it made payments to consultants in late December of last year totaling nearly $1.6 million out of the downtown TIF district. Even worse, the payments were made by the Ballard administration without first seeking approval of the Metropolitan Development Commission, the first known instance of a vendor being paid TIF funds without the MDC's prior approval. Additionally, it has been learned that the law firm of Bingham Greenebaum Doll has been paid at least $600,000 more than the $1.5 million the city was contractually obligated to pay the firm under the terms of an October 2013 legal engagement agreement.

The City-County Council learned last year that the administration had illegally entered into contracts with various consultants on the proposed Marion County Criminal Justice Center in late 2013 totaling at least $12.6 million without first obtaining an appropriation from the council or even bothering to notify the council of the significant encumbrance. The administration skipped one month's lease payments in the 2013 budget and transferred money between funds in order to free up enough money to pay the unauthorized consultancy fees without the council's knowledge.

In addition, only Advance Indiana has reported the fact that the administration in an unprecedented move agreed to pay up to $1.5 million to the two losing bidders who competed against WMB Heartland Justice Partners for the 35-year, $1.75 billion contract to build, operate and maintain the criminal justice center. Advance Indiana's reporting has shown that the flawed bidding process undertaken by the administration for the P3 agreement was nothing more than a rigged bidding process intended to give the public the false appearance a competitive bidding process had been undertaken. The Ballard administration unilaterally decided this project would be undertaken as a public-private partnership agreement, likely because it allowed the administration to skirt any public referendum process for the massive project, without first consulting the council. If the council turns down the proposal at this point, taxpayers will be out at least $15 million in wasted expenditures, but that may well be the council's only choice given the much larger amount of public money at stake if it goes forward with the badly-flawed proposal.

UPDATE: Here's an informal opinion just released by the state's Public Access Counselor in response to inquiries by Bingham Greenebaum Doll of the propriety of redacting certain information from the proposal submitted by WMB Heartland Justice Partners' winning bid to build, operate and maintain the proposed criminal justice center. The Public Access Counselor says it was allowed to review the redacted information in camera and determined it complies with APRA. The opinion does not state the basis for the redacted information, which would help in analyzing the compliance with the law. I guess we'll just have to take their word for it. I've not had the opportunity to review the proposal documents just uploaded to the City's website, but if you click the link, you can see that the financial proposal document is so heavily redacted that it provides little benefit to anyone from the public trying to make sense of it. Essentially, we're paying millions of dollars to this law firm to figure out any way possible to hide anything of value from the public about this extremely corrupt deal brokered by an organized crime syndicate known as the Downtown Mafia.

The Indianapolis Star has published a rather lengthy story about the possible benefits/downside of the proposed criminal justice center project. Unfortunately, the story barely touches the surface and ignores the overwhelming evidence Advance Indiana has presented to prove this and the Long Beach Courthouse project in California upon which the Marion County project is based were both rigged deals engineered by the same suspect group of bidders. To demonstrate just how flawed the story is, it relies upon the one-sided Ohio River bridge projects the Daniels administration entered into with the state of Kentucky and a group of politically-connected contractors, including Walsh Construction, a key partner in the winning justice center project, as an example of why this P3 project will succeed:

The administration’s go-to example of this sort of deal done right is the Ohio River Bridges Project in Southern Indiana and Louisville, Ky. Indiana law allows for public-private partnerships. Kentucky law doesn’t. 

Using a traditional procurement, Kentucky has shaved $41.8 million off initial costs estimates of $1.31 billion — a 3 percent savings, according to the project’s last financial update in September 2014. 

Using the performance-based private model, Indiana blew Kentucky’s bridge savings out of the water. Indiana is now expected to spend $1.06 billion — down 17 percent from pre-construction estimates of $1.28 billion. 

That’s not the only perk. Indiana’s contract includes a 35-year maintenance agreement. Will Wingfield, a spokesman for the Indiana Department of Transportation, said that should cover three major repavings, plus joint work, bridge inspections and plowing when it snows.

“On a traditional bid contract they’re competing over who can get concrete and dirt and steel to the site the least expensive way possible,” Wingfield said. “This, they’re looking at costs in the long run.”

That example is so misplaced I don't know where to begin. The fact is Indiana is paying a disproportionate share of the costs for those two bridges. Motorists will be hit with tolls for the first time to cross the Ohio River to enter Louisville using one of the two new bridges. There is plenty reason to believe the traffic studies were badly flawed just like the traffic studies used by the original buyers of the Indiana Toll Road, which is being bought out of bankruptcy less than a decade after the deal was executed. The P3 operators of the two bridges bear no risks. If the tolls are insufficient to cover debt service on the bonds, money will have to be diverted from road funds used to pay for maintenance and new projects elsewhere in the state. Until the bridges are completed and the P3 operator starts collecting tolls, we won't know just how much of a success or boondoggle this project will turn out to be. The latter, however, to the least of the discerning seems to be the more likely outcome.