Friday, August 14, 2009

The Indianapolis Convention & Visitors Association Wants More of Your Tax Dollars

Part of the "challenges" (don't you love these words the professional panhandlers like to use) faced by the Capital Improvement Board reported by the Indianapolis Star yesterday was how to get more money into the pockets of the Indianapolis Convention and Visitors Association to better market the new convention center. We are told that the ICVA needs $3 to $5 million more per year.

Probably the most frustrating thing about the CIB bailout debate is that neither the administration or the council demanded changes in how the CIB operates as a condition to receiving additional tax dollars. Despite the fact that the folks that run the CIB haven't been able to shoot straight for nearly a decade, Republicans on the council almost unanimously voted to give the CIB million more in taxpayer money, which will lead to more taxes and borrowing. No structural changes to the Board were demanded in order to assure the financial disaster wasn't repeated in the future. It wasn't more than a few days after the Council vote that the Board was talking about how it could give away more of our tax dollars that the Board hasn't yet put its hands on.

Yesterday, I addressed the administration and the CIB's efforts to get the Pacers at least $15 million more by picking up the operating costs on Conseco Fieldhouse. As I pointed out yesterday, the financial penalties for quitting the contract early are so substantial, the Pacers have no leverage to demand concessions from the CIB or this administration. However in the CIB meeting held this past Monday, nobody even mentioned the contractual penalties that the Pacers can't afford to pay should they leave early. Instead the focus was on how to give the Simons $15 million, which now according to Mayor Ballard's administration, could be more Contrary to the claims of some, there has never been any sort of trade off planned whereby the Pacers would have to kick back non-Pacer event revenue at Conseco in exchange for the City picking up the operating costs. Rather the only plan publicly discussed is for the Pacers to continue getting 100% revenue on the building while taxpayers pick up the cost to run it, an utterly insane proposal. That the CIB is taking for granted that the Board intends to do this speaks volumes about why the Board needs to be changed.

Today though I address the new hog at the taxpayer trough, the Indianapolis Convention and Visitor's Association. At first glance, it makes a certain amount of sense to invest more money in marketing given the size of the new convention center and the need to fill it up with paying customers. The problem is, like the CIB, nobody takes a close look at how the ICVA actually operates and demands changes.

In its 2007 tax return, the ICVA showed revenues of $12,159,994 almost all of which came from taxpayers. For an organization allegedly starved for cash, the ICVA had $1,549,267 stashed in mutual funds and equity securities. The organization paid out salaries of $4,326,029 and provided benefits worth $692,734, for a total employee expense of $5,018,763. Thus employee expenses make up an incredible 41% of its budget. And that is not counting other overhead expenses. As with numerous non-profit organizations funded by Indianapolis taxpayers, most of the tax dollars get swallowed up in overhead.

As far as individual officer salaries at ICVA, former ICVA President and CEO Robert Bedell pulled in $353,777 in salary and benefits. Reportedly, the new ICA President/CEO Don Welsh makes substantially more. It is a safe be that his combined salary and benefits total over $400,000. According to the 2007 report, Alfred Bennett, V.P. Sales made $142,579, Matthew Carter, V.P. Strategic Development made $143,343, Mary Huggard, V.P. Communications and Development pulled in $144,637, and James E. Wallis, V.P. of Administration and Technology, made $136,858. Those are just the officers. Obviously the top employees are also pulled down substantial sums of money.

I find it interesting that when organizations like this start cutting salary and benefits, they always first go after the people making just over minimum wage rather than the fat cats pulling down six figures.

If you wonder why the boards that run these organizations don't check these excesses, you only have to look at who the board members are. According to the 2007 tax return, here is just a partial list of some ICVA board members: Michael Browning, James Dora, Craig Huse, Barney Levengood, Robert Grand, James Morris, and Tamara Zahn. It's like a who's who list of developers, professional panhandlers, and people with substantial conflicts.

It's arguable whether the ICVA needs additional money. But at the very least, the Council needs to demand changes in how the ICVA conducts business. Too many of our tax dollars are tied up in overly-generous salaries and benefits ICVA pays its officers and top employees. The Council failed to demand reform before handing the CIB a pile of taxpayer money. Will they make the same mistake with the CIB?


guy77money said...

Hmmm Jim Morris works for the Pacers and sits on the board how convenient. ;)

a smith said...

It is outrageous that the Pacers claim that they have never made any money should go unchallenged.

Releasing partial and unaudited financials to a few friendly insiders, who are forced to sign non disclosure agreements, is NOT enough to convince anyone with ANY brains to believe this fairy tale that the Simons are not making money on their Pacers entertainment enterprise.

Public disclosure of audited financial statements from the Pacers and all other related entertainment companies along with legal affidavits from the team owners, accountants, auditors, and bankers would be a good start to legitimacy and creditability.

Anything less should be disregarded as fantasy and possibly a crime.

a smith said...

Perhaps the private sector contribution to market the city should come from the COLTS and PACERS .

Additionally the privately owned sports teams should be paying there own operating expenses like every other hard working private business in this state, not taxpayers!

jabberdoodle said...

I don't know why we don't just hire the ad firm the ICVA uses and contract directly with the folks the ICVA subcontracts with to get visitor numbers -- cut out the very expensive middleman.

Then, if the hotels wanted to, they could fund the reduced ICVA to give discounts for their hotel rooms. It could be called a 'private-private' partnership.

We'd easily save millions and have more accountability to the taxpayers who fund this boondoggle.