Sunday, April 12, 2009

My Advice to Mayor Ballard on Fixing the CIB

Early this week Indianapolis Mayor Greg Ballard is supposed to roll out a plan for dealing with the shortfall in the Capital Improvement Board (CIB) budget. (Honestly, I thought he had signed onto Senator Luke Kenley's plan when it was introduced, but I guess that was wrong.) In advance of that, I wanted to offer some advice which I'm sure will be ignored.


  • Be aware of the political consequences, Mayor. If you do the wrong thing, you will not only assure your defeat in 2011 as a very unpopular mayor, but you'll drag down the Republican council members with you. This is a very important decision.
  • Stop falling on the sword for things your predecessor has done. This isn't the military. Bart Peterson and Fred Glass deserve blame for the boneheaded CIB-Colts Lucas Oil Stadium deal that is chiefly responsible for the CIB's fiscal mess. Don't hesitate to blame predecessors for the mess you found your administration in on January 1, 2008. You don't see President Obama falling on the sword for things that happened during President Bush's watch.
  • Don't be afraid to surround yourself with advisers who are not just going to just be "yes" men and women. A strong administrator is willing to listen to diverse opinions and reach a conclusion. Surrounding yourself with a bunch of 1990s era advisers was not a good idea.
  • Just because your predecessors took a certain path in favor of more corporate welfare at the expense of taxpayers does not mean that is the right path for you to take.
  • Can the spin that this bailout is about the convention/hospitality business, and not professional sports. No one is buying that. The CIB mess is almost completely due to the giveaways the CIB "negotiated" with the Colts and Pacers.
  • Listen to those in the academia. The studies overwhelmingly show professional sports are not a good investment for local government. Recognize that publicly and admit that our large investment in professional sports teams was not a wise investment.

The Capital Improvement Board

  • Publicly recognize that the CIB has not been good stewards of the public's money in the past and indicate there have to be changes in the CIB
  • Ask the legislature for reorganization of the CIB so that members better represent the community. There should be a ban on people having a substantial conflict sitting on the board. Neighborhood groups like MCANA should have a representative.
  • Require that all the records of the CIB should be opened up for scrutiny and the major records placed on-line. For example, just like any other part of government, we should know the names and salaries of everyone who works for the CIB.
  • Ballard should demand the resignation of everyone on the Board and appoint a new Board.
  • There needs to be an independent audit of the CIB's books by an outside accounting firm. That audit needs to be made public.

The Plan

  • The Mayor needs to rule out any hospitality tax increases. Talk about "falling dominoes," if taxes like the food and beverage tax, the innkeeper's tax, etc. are raised, Indianapolis' convention and hospitality businesses will take a much bigger hit than they will by the city losing a professional sports team.
  • From the outset, rule out the CIB picking up $15 million dollars of the Pacers' operating costs at Conseco. That should have never been put on the table by the CIB in this crisis.
  • Sit down with the Pacers and Colts and tell they have two choices: 1) work with the City in revising their deals so the city can close the $32 million annual operating deficit without raising taxes, or 2) you will instruct the CIB to file bankruptcy and let a federal judge rewrite the contracts for them. Then don't hesitate to pull the bankruptcy trigger if the teams refuse to renegotiate. Frankly, considering that bankruptcy would also allow the CIB to restructure its debt, it's almost preferable that they go that route.
  • Bankruptcy would let the Colts and Pacers walk. The Colts, however, are unlikely to walk considering the very favorable deal they struck for a stadium they play in practically free of charge, not to mention all the revenue they get from that stadium. The Pacers are a much more likely candidate to move, but they also have a sweet deal at Conseco Fieldhouse. Regardless, if either team left it would have positively no effect on the convention business. Even the downtown hospitality business associated with those teams would relocate elsewhere as people spend their money on other things besides attending professional sporting events.

We shall see what transpires this week.


Jon said...

I agree with your suggestions for the mayor and the CIB. Unfortunately, I also agree with your summation that you likely will be ignored. Cynically I would add that no one in local government has been an advocate for taxpayers in the last 25 years and one shouldn't expect that to change now.

M Theory said...

Love it! I've got my fingers crossed that Ballard is going to make a strong (not lame) move this week!

Downtown Indy said...

Sound ideas that probably will fall on deaf ears. Today the mayor is supposed to announce some plan of his own. I hope the marine speaks, not the puppet.

I know said...

Now onto the new practice stadium!