Thursday, September 17, 2009

Council Committee Bestows $1.25 Million More On ICVA, Does Not Ask For Accountability From Organization

This morning the Indianapolis Star reports that the Municipal Corporations Committee of the Indianapolis City-County Council last night passed an amendment moving $1.25 million from the
the Capital Improvement Board's renovation fund to the ICVA's budget. Part of the renovation money was originally designated to replace existing carpet in the existing convention center to match the expanded facility. Now that replacement will be delayed.

According to the Indianapolis Star, Welsh reported that the money will be used to draw convention business to Indianapolis through efforts such as calling on clients and offering discounts. He said at least $500,000 more would be needed to carry out the group's marketing plans for next year, which include promoting Indianapolis as a leisure destination.

The IVA's use of "discounts" to lure convention business was first identified by Gary Welsh of Advance Indiana. The underreported story is that taxpayers are subsidizing many of the hotel rooms in the city when they are provided at discounted rates to convention goers. This situation will undoubtedly increase with the increase in the city's hotel tax, giving Indianapolis the highest combined hotel and sales tax in the country.

The council committee meeting again demonstrates a lack of due diligence by council members. Not a single question was asked about ICVA's operation and whether the organization is spending its money properly. Many ICVA officers and employees pull in six figure incomes. The vast majority of ICVA's budget goes to salaries and benefits. Don Welsh's annual salary is approximately $400,000. He has already indicated he intends to use additional money to hire yet another six figure sales person. In most sales job, you live or die with commissions, succeeding only when you bring in more business. But this is the ICVA. ICVA sales people receive comfy six figure salaries regardless of how successful they are in their jobs.

I have reported on the ICVA's fiscal irresponsibility previously:

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.
Near the end of the article, Star reporter Francesca Jarosz notes that the ICVA plans to "continue discussions with the city, private businesses and arts and cultural groups in hopes of finding more dollars. Welsh said he's optimistic -- even in tough economic times -- that the group can come up with additional funds."

I can only guess that having "discussions" somehow produces more revenue because the CIB and ICVA are all the time talking about having "discussions" with groups like the Pacers and the Arts Council to hand out more money when they have none. Nonetheless, I thought it was the CIB which was, for some reason, in the business of bestowing money on arts and cultural groups, a practice that has been curtailed since the CIB ran out of money. Now it appears that the ICVA wants to take over the CIB's job as benefactor to the city's arts and cultural groups.

Does anyone else see a big shell game being played by the CIB and ICVA, using taxpayers money as the prize?

See also a couple excellent posts over at Indy Tax Dollars:

September 16, 2009, A Necessary Look Back
September 7, 2009, "PINCHING PENNIES"


Jon said...

I'm sorry I must have slept through the announcement that we elected Baker & Daniels and Barnes & Thornburg as the overseers of Indianapolis. So much for the pledge to oust the insiders Mr. Mayor!

I know said...

"Does anyone else see a big shell game being played by the CIB and ICVA, using taxpayers money as the prize?"

Yes Paul it is very clear as is another situation. Check your email in reference to that very thing.