Mark Miles For Governor, Or Mayor?

That's what Star editorial writer Russ Pulliam tosses out for consideration in his weekly column today. He's even getting encouragement from the religious right's Curt Smith, who heads the Indiana Family Institute and is a leading advocate for adoption of a constitutional amendment banning same sex relationships or similar civil unions. The Democratic blog, Indianapolis Times, has speculated that Miles is working behind the scenes to dump Ballard to make way for his own candidacy. Miles is best known for his leadership role at the CICP, a publicly-funded nonprofit that promotes welfare for corporations, including hundreds of millions in subsidies for billionaire sports team owners. He has been a big proponent of the CIB bailout, tax increases and all. One thing is clear. Russ Pulliam is not just engaged in idle speculation. Somebody put a bug in his ear. You can bet on that.

Just What Has The Health & Hospital Corporation Been Up To For The Past Three Years?

A source in Indianapolis' construction trade business tells me it's been no secret in those circles that the Health and Hospital Corporation of Marion County's Board of Trustees has been laying the groundwork to build a $900 million new hospital to replace Wishard Hospital for at least the past three years. In fact, word on the street is that they've already lined up an architect to design the building. That's the same way Lucas Oil Stadium went down. The CIB quietly began purchasing land and making plans for the new stadium years before the public had any idea what was happening. Early on in Mayor Peterson's administration he was asked about talk of a plan for a new stadium and denied its existence.

If you have some spare time, rummage through these old board minutes of the HHC and see if you can find any discussion of the new hospital. You'll have a tough time. I think the board minutes use the term "HHC Strategic Plan" as code whenever the topic of building a new hospital is concerned so nobody can read the minutes and figure out what the hell they're talking about. I also notice that attorney Greg Fehribach serves on the board. He makes his living as a city contract attorney, getting paid well north of a $100,000 annually. Gee, whose interests does he represent on the board I wonder?

The next public inquiry needs to resolve which Marion County legislator stuck a public referendum requirement this November for Marion County, a special election that will cost taxpayers well over $1 million, in the state budget without a public hearing on it. There would have been no extra cost to taxpayers if it had been scheduled at a regular election. The Health & Hospital Corporation's registered lobbyist is Barnes & Thornburg. Did B&T lobbyist, part-time City-County Councilor and wannabe state senator Ryan Vaughn have anything to do with placing the referendum language in the state budget? Inquiring minds want to know.

Mary, Mary, Quite Confused

WTHR's Mary Milz turns in this baffling report about how the success of Lucas Oil Stadium is not translating into additional revenues for the cash-strapped CIB. Well, duh, that's because the stadium deal allows Colts' owner Jim Irsay to pocket all of those revenues, a point Milz story completely misses. Here's what she says:

The city says business is good at Lucas Oil Stadium, but the money it's making is not filtering down to the Capital Improvement Board, the board that runs it. Nearly one year after the stadium opened, it's hosted more than football fans.

Stadium Director Mike Fox says so far Lucas Oil has hosted 174 events, or more than four times as many as the RCA Dome did in its last year. The stadium's hosted everything from the Kenny Chesney concert to a job fair to luncheons and board meetings.

Still, it's not anywhere near enough to cover the operating costs.

Paul Okeson, the mayor's chief of staff, said while the city does need to market itself more, there just aren't that many of the big multi-day events out there. He said, more importantly, running a stadium isn't exactly a break-even proposition.

"It's a bit of a loss leader," Okeson said. "The idea isn't for the facility to necessarily make money but for the economy to grow and for people to spend more."

He says it's why scoring the 2012 Super Bowl was such a big deal as it will bring more than 100,000 well-heeled fans to Indianapolis with a potential economic impact of several hundred million dollars.

"Some of the more lucrative events don't pay to use the facility," he said, "and that's the competitive nature of the business."

The CIB's continuing money issues have raised some concerns among some who've booked the stadium. Dan Acheson, Executive Director of Drum Corps International, says he's well aware of the CIB's $12 million shortfall.

"I'm sure it will have an impact on services at some point, so yeah, I'm concerned about that and hopefully we'll have good people doing the work on finding a solution," he said.

Indianapolis Convention and Visitors Association President Don Welsh said he's working hard to alleviate any concerns.

"They can be assured that the buildings will be open and operating and serviced in the manner they'd expect in Indianapolis," he said.

Despite the CIB's financial trouble, some groups like Music for All, formerly Bands of America, are getting a break to keep them marching back.

Music For All's CEO L. Scott McCormick said the stadium cost his group 25% more to rent than the RCA Dome, which was too much more for a non-profit. Given the growing competitiveness of the convention market, the CIB agreed to broker a better deal.

McCormick said, "When they asked what it would take to keep the organization here, they asked us to lay it all out and I think we presented a fair number and it looks like we'll end up with that."

He declined to give the final number as the deal had yet to be finalized.

What I find particularly troubling in the report is Mike Fox's comment that "some of the more lucrative events don't pay to use the facility, and that's the competitive nature of the business." Huh? You know Irsay isn't allowing groups to use the stadium for free. What Fox is saying is that the CIB is subsidizing those groups to come to Indianapolis, which translates into the taxpayers paying Irsay for the use of LOS for those events. Her story notes that the CIB brokered a better deal for Music For All after its costs soared 25% at LOS compared to the RCA Dome, which means the CIB is subsidizing the event. I've reported previously on how the CIB uses the ICVA to buy down hotel rates for conventions to lure them to the City because the room costs are high in Indianapolis compared to other cities. You can bet the ICVA is also picking up those costs to subsidize the higher costs of hosting events at LOS.

This probably helps explain why Jim Irsay says the CIB is inflating the actual costs of running LOS. He charges much higher rates for events than the CIB charged for those same events when they were hosted at the RCA Dome. Obviously, the CIB has no control over the charges he imposes. Instead of addressing that problem, the CIB puts out fires created by the higher fees by offering cash incentives to groups to use LOS. That's part of the reason it costs $20 million more to operate LOS compared to the RCA Dome. If taxpayers knew what was really going on . . .

Yikes, He's A Public Defender?

A 31-year-old Marion County Public Defender attorney, Ikedigbo Nnaemeka, is accused of breaking into a residence and attacking a 17-year-old boy according to WRTV:

Ikedigbo Nnaemeka, 31, was charged with attempted residential entry and battery after he tried to force his way inside a home in the 2500 block of East 18th Street just after 2 a.m. Tuesday, said Lt. Jeffrey Duhamell.

According to the police report, Nnaemeka also attacked the homeowner's 17-year-old son, who was trying to keep him out of the home.

Investigators told 6News' Jack Rinehart that the arrest is the latest in a string of bizarre behavior by Nnaemeka.

A month ago, police said he was seen speeding and weaving in and out of traffic near Washington and East streets. According to the police report, Nnaemeka stopped his car in the middle of the intersection and "acted erratically" when he got out of the vehicle.

Nnaemeka has worked for the Marion County Public Defender Agency for just more than a year.

In 2003, he was convicted in New York of carrying a handgun without a license and was on probation when he was hired in Marion County.

UPDATE: Nnaemeka was subsequently acquitted of the charges against him. According to Nnaemeka's attorney, Jeff Cardella, the first officer on the scene perjured himself based on the testimony of the second officer on the scene.

Long Punishing Leising For Voting Against Budget?

Jim Shella has a blog item that is turning heads at the State House because of what some say is an attempt by Senate President Pro Tempore David Long to damage one of his own Republican senators, who was one of three Republican members who voted against the state budget deal yesterday:

State lawmakers are gone from the Statehouse but a couple of issues remain. State Senate Democrats are upset that majority Republicans forbid them from videotaping the final budget debate. They had videotaped only the Democratic speeches throughout the Special Session, or so they say.

Republicans, meantime, are upset with one of their own. Senator Jean Leising voted against the budget (one of 3 Republicans to do so) but sent a memo to President Pro Tem David Long asking why Senators didn’t get per diem payments on days during the Special Session when the Senate didn’t convene. Whether Senators deserve the pay is a point that is unclear in the law.

Absolutely clear is the fact that fellow Senators leaked the memo to make Leising look bad.

Did Long's office leak an edited version of Leising's e-mail that allowed it to be interpreted out of context? That's what some are saying. His office says no. See the update below.

UPDATE: Senate Republican spokesman Scott Minier has sent me the full text of Sen. Leising's e-mail, which you can view below. Minier assures us the leak of the e-mail did not come from anyone within Senate President Pro Tempore David Long's office, "nor to his knowledge, from anyone else in the Senate Majority Caucus or its staff." "If the memo was provided to a member of the media, it could have come from any number of sources, since it was widely distributed by Sen. Leising personally," Minier writes. "As for Sen. Leising’s vote, while it may have been disappointing to Senate leadership, Sen. Leising is an independently elected legislator and is entitled to vote as she chooses," he continued. "If there is to be any discussion between Sen. Leising and Sen. Long, it will be handled in private and not through the mainstream media or blogs." "That is how Sen. Long has always managed the Senate in the past and there has been no change in that approach or policy," Minier concluded.

Here's the text of Leising's June 30 memo to Sen. Long:

Can you please clarify for me the law on Special Session per diem? After reading two articles in the Indianapolis Star stating that we are receiving per diem, I took the time to research the attached copies from the Indiana Acts.

It would appear to me that we are to be paid per diem during the Special Session.

Thanks for your attention to this matter.

Minier forwarded a memo that Sen. Long directed Senate staff to send to all senators on June 8 before Leising sent her memo to Long that stated the following policy for payment of per diem during the special session:

Per Senator Long, June’s Per Diem will be handled in the following manner:

The Interim Per Diem will still be limited to two (2) days for the month but once Special Session has convened on June 11, 2009 there will be no additional Interim Per Diem and travel sign-ins allowed until Sine Die.

Session Per Diem will be paid for the following:

1) Each day the Senate actually meets in Session and you are present on the roll call;
2) Each day you attend a “special” committee meeting, of which you are a member, that has been approved in advance by Senator Long, to address issues pertaining to Special Session; and
3) Other individual cases approved in advance by the President Pro Tem. Included in the definition of special cases would be a caucus meeting called by leadership.

Once Special Session has convened there will be no sign-ins allowed for Interim Per Diem and travel until after Sine Die. Mileage will be paid a maximum of one round trip per week in any week a senator receives session per diem under one of the three circumstances above. On any day a senator does not qualify for session per diem, he/she will continue to receive the normal $55.20 as if we were not in session.

We anticipate the House of Representatives will be following essentially the same protocol. Interim committee meetings will still be handled through LSA as they normally are during the Interim.

It would appear to me that Sen. Leising had a misapprehension about the per diem policy, which can get complicated as you can see from the staff member's description of how it was to handled during the special session. It doesn't appear to me that she was asking for anything the June 8 memo didn't say would be covered. WISH-TV reporter Jim Shella interpreted the leaking of the Leising memo as a slight by Long's leadership, and the same message was communicated to me as well. I can't read into Leising's memo that she thought members were entitled to a session per diem payment on days they weren't actually in session, although the Senate memo clearly allows the per diem on days when they were attending a committee on which they served as a member or a caucus meeting, in addition to actual session days.

A big thanks to Minier for sending the information to clear it up. Whoever leaked her memo to the media put a negative spin on it from Leising's standpoint. I understand why she and her supporters believed it was being interpreted out of context. Clearly, the memo was not edited by anyone though as had been suggested by some.

Oxley Charged With Public Intoxication And Impersonating A Lawmaker

Former State Representative and 2008 Democratic Lt. Governor candidate Dennie Oxley, Jr. has been charged with public intoxication and impersonating a state legislator to avoid arrest, stemming from an incident at a downtown Citgo gas station last Friday morning according to the Marion Co. Prosecutor's Office. A female companion of Oxley's, who works for the House Democratic staff, had to be taken to the hospital after she passed out at the gas station. Indianapolis police planned to arrest Oxley for public intoxication, but he avoided arrest by telling police he was a state lawmaker in Indianapolis for the special session. In fact, he resigned from the House last year after being named to the Democratic ticket and his father, Dennie Oxley, Sr., took his seat. Oxley works as a senior advisor to House Speaker Pat Bauer. Oxley has a pending drunk driving arrest charge from February, which had originally been scheduled for disposition this week, but has been delayed in light of these new charges.

UPDATE: According to various television news reports in Indianapolis, Dennie Oxley, Jr. had been expected to surrender to Indianapolis police today at 1:00 p.m. to be booked on the charges, but he failed to do so as of 7:00 p.m. tonight.

WRTV now reports that Oxley turned himself in to police early this morning.

IURC: Ballard Administration Allowing Veolia To Rape Indianapolis Water Company

I've been telling you for months now about the self-dealing and corruption that surrounded the purchase of the Indianapolis Water Company and the subsequent operating agreement the City entered into with the French-owned company, Veolia, to manage it. Top Democratic lobbyists with close ties to former Mayor Bart Peterson were hired to help ink the deal, which nets the company more than $40 million a year, and which represents 80% of the water company's maintenance and operating budget.

An IURC order this week scaling back a 17.6% emergency rate hike sought by the Ballard administration has some scathing observations about the administration of Veolia's management agreement. The IURC winced at a 5% scheduled payment increase to Veolia approved by the Ballard administration. The IURC says the administration told it the management fee could not be reduced, although it admitted it had never attempted to renegotiate the contract with Veolia. Jim Steele told the IURC that Veolia wasn't to blame for the variable rate bond fiasco so it shouldn't be asked to sacrifice any fees.

The IURC found it disturbing that the administration had made no effort at cost-cutting before seeking the emergency rate increase. "If the Department operated the utility through its own employees, the Commission would expect the implementation of cost cutting measures related to those employees, such as a freeze on pay raises, and other costs that are embedded in the Veolia management fees," the order said. "The Commission certainly would not anticipate a proposed increase in salaries in the face of an emergency financial situation," the order reads. "The evidence is undisputed that the Department has made no attempt to contact or negotiate with Veolia on maintaining the 2009 management fees at the 2008 level or postponing any increase given the Department's current financial situation." The Commission then ordered to management agreement altered to the extent it allows for higher fees to be paid to Veolia.

There's more. The IURC concluded that the management agreement with Veolia is "profoundly disturbing." In 2007, the water company amended the management agreement with Veolia to increase its fees without notifying the IURC, a requirement imposed by a 2002 order issued by the Commission. That 2007 amendment requires the water company to pay $5 million to Veolia for "past unexpected increases incurred during the years 2002 through 2006." Two of three payments of that amount have already been paid to Veolia; the Commission ordered the third payment of $1.667 million halted until the Commission can determine that the payment is "reasonable and in the public interest."

Further, the IURC questioned "incentive payments" being paid to Veolia that may not be supported. Although Veolia has claimed 90% of its eligible incentive payments, the Commission said the record lacked evidence "Veolia ha[d] been able to reach or exceed the performance metrics in the first few years." Even more disturbing is the Commission's discovery that 60% of potential incentive payments were being paid out to Veolia "before it is technically determined that those payments have in fact been earned." The final payment each year is described as an "incentive true-up." "To characterize compensation for which there is somewhere between a 60% and better than a 90% probability of being paid, and for which that can be determined almost a year in advance, as being 'incentive' compensation which is purportedly 'performance based' stretches credulity at a minimum and approaches disingenuousness," the order reads. "If the intent of the agreement is simply to expand Veolia's compensation by an amount little short of 25%, on top of the fixed fee amount, then the Commission suggests that the agreement should have simply said so."

As I previously reported, the water company's original consultant, Carlton Curry, opposed a number of incentive payments being claimed by Veolia early on in the contract. If he denied the payment, Veolia simply went behind his back with its powerful lobbyists and got the payments it wanted whether it earned them or not. Curry's guardian role was effectively nullified by the Peterson administration.

The Commission's order also halved the more than $12 million the Ballard administration sought in capital improvement funding as part of the rate increase. The Commission noted that the water company's budget for funding extensions and replacements is higher than comparable budgets over the past five years and the highest experienced in the last three years. The Commission approved capital project needs the administration was able to document with evidence.

The findings contained in the IURC's latest order should be deeply disturbing to the public, which ultimately has to foot the bill for the operation of the water company. Mayor Ballard promised an investigation into the water company deal when he ran for mayor in 2007. Like so many of his promises, that one got swept away. In its place, we have an administration being operated for the benefit of big campaign contributors, city contractors and lobbyists. The taxpayers are the big losers. As a Republican, it is very disillusioning to see the City continuing to be operated in the same fashion it operated during the eight years of the Peterson administration. Hats off to the IURC for doing the job the Ballard administration failed to do.

Three Lonely Republicans

Only three Republican members of the legislature voted against the state budget approved yesterday. They are Senators Mike Delph, Jean Leising and Vaneeta Becker. I didn't hear the debate so I don't know what reasons they offered for voting against it. All 48 House Republicans voted for it. It's worth noting that two Marion County legislators, who went out of their way to make sure I listed them on this blog during last year's election as taking a pledge to oppose a bailout of the CIB, voted for the budget with the CIB bailout. They are Rep. Phil Hinkle and Sen. Brent Waltz. I will let them explain to you why they broke their pledge to the voters of their respective districts. My state representative, John Day, voted against the budget bill. He had said earlier that he opposed the CIB bailout but might have to vote for it if it wound up in the state budget. It wound up in the state budget and he still voted against it. I'm not sure why he voted against it, but I suspect it was over something like school funding and not the CIB. Note that Mary Ann "No Fancy House" Sullivan voted for the budget bill. Her husband's construction firm, Shiel-Sexton, has made tens of millions off CIB projects. Of course she supported the CIB bailout.

UPDATE: The Evansville newspaper says Becker voted against it, like other Evansville area legislators, because it put a higher priority on bailing out the CIB than other more pressing matters like education: "Rep. Gail Riecken, D-Evansville, said she couldn't support the budget because "it just doesn't have the right priorities." Like Van Haaften, she cited the inclusion of the stadium bailout. "It was possible to get $24 million together for stadiums, but it wasn't possible to support the kids in the state," she said. One of the only Senate Republicans to oppose the spending plan, Vaneta Becker of Evansville said she voted no for the same reason."

Here's a report explaining Sen. Leising's vote against the state budget, which complained about priorities, including the CIB bailout and the tax treatment of the Shelbyville racino:

“I felt I could not support the budget for several reasons,” Leising said. “Unlike the budget of April 29th that I supported, this bill did not include language to continue the Indiana Soldiers’ and Sailors’ Children’s Home in Knightstown. Although it provided generous sources of revenue for the Indianapolis Capitol Improvement Board (CIB), the double taxation issue negatively impacting the Shelbyville Racino was not addressed.

“Several educational issues also created concern,” Leising continued, “but the most serious for me is the shortfall for schools in the second year of the biennial budget. While it leaves a substantial amount in reserves for a rainy day, each of my 11 school corporations will experience a decrease in funding during the second year of the two-year budget.”

Leising said once again urban areas of the state like Indianapolis and Lake County won in the budget fight at the expense of rural counties and school corporations.

According to Leising, the CIB – which operates Conseco Fieldhouse, Lucas Oil Stadium, Victory Field, the Convention Center and the Colts Practice Facility – currently makes no direct contribution of sales or income tax to the state general fund. Instead, under current law, up to $16 million per year generated by these facilities goes directly to the Marion County Professional Sports Development Area (PSDA) for operation of these facilities.

Under the new budget, the CIB will receive an additional $8 million per year from the expansion of the downtown PSDA. They will be permitted to borrow $9 million in loans from the state treasurer for each of the next three years. They anticipate a $4 million savings in debt service as the state is going to back up their existing loans. The Marion County City-County Council will be allowed, under the new law, to increase the hotel tax from 9 to 10 percent, generating $4 million. After 2013, the City-County Council would be permitted to increase the admissions tax and car rental tax in Marion County.

In contrast, the Shelbyville Racino – Indiana Live! – paid the state $250 million dollars for a license to locate in Shelby County. This money was used directly for statewide property tax relief last year. From July 1, 2008, through June 19, 2009, the racino contributed over $50 million dollars to the state general fund in gaming tax and $5.4 million directly to Shelby County.

“It is difficult for me to understand why the state refuses to fix their double taxation problem,” Leising said. “Indiana Live! is one of the largest employers in my district with approximately 1,000 workers.

State Budget Includes Referendum For New Hospital

Our friends over at the State House stuck referendum language into the state budget asking Marion County voters to approve the construction of a new hospital to replace Wishard Hospital. "This is an important issue that warrants the public's participation." Matthew Gutwein, chief executive officer of Marion County Health and Hospital Corp., which oversees Wishard, wrote in an e-mail Tuesday to the Star. "Any project that Wishard would propose would not involve any tax increase."

Now do you believe that? Does Gutwein think we are stupid enough to believe that this county can spend hundreds of millions of dollars on a new hospital and there won't be any tax increase somewhere along the line? Folks, this is another deal cooked up by the big law firms to generate some money for the professional services crowd. With school construction projects getting voted down all over the state, except for IPS, the bond deals are drying up. Don't believe a word they're telling you. I suppose this is just one of the few dozen surprises we're going to learn about over the next few weeks that got stuck in the state budget at the last minute. Lawmakers did not upload the proposed state budget online until right before the House began debating it and then voted on it a couple of hours later, allowing no time for public scrutiny of it.