Monday, September 14, 2009

Indianapolis Star Notes Funding Cut For Indianapolis Downtown Inc.

In an article appearing in today's Indianapolis Star, writer Francesca Jarosz notes the $500,000 cut in funding for Indianapolis Downtown, Inc., a non-profit corporation set up to promote Indianapolis. IDI not only receives a subsidy of over a $1 million, but also receives $600,000 subsidy from the Indianapolis Bond Bank. It is not clear why the Indianapolis Bond Bank is in the business of subsidizing a non-profit corporation. Previously I have reported on fishy consultant contracts awarded by the Bond Bank to John Dillon, while Dillon was President of the Bond Bank Board. Dillon walked away with hundreds of thousands of taxpayer dollars as a consultant on the water company deal and the construction of the convention center and Lucas Oil Stadium.

While Jarosz's article does exaggerate IDI's efforts, I think she does a good job of balancing the fact that this "pass through" of taxpayer dollars is costly to taxpayers. Zahn's $200,000 salary is noted as well as the fact that IDI has stashed away $7.7 million in assets. The true balance of the article comes with the comments of community activist Pat Andrews:
Pat Andrews, vice president of the Marion County Alliance of Neighborhood Associations, said some of the services IDI provides, such as promoting Downtown, is done by other groups such as the ICVA and the Indiana Sports Corp. Others, she said, could be done more cheaply by city employees.

IDI President Tamara Zahn earns about $200,000 a year, while the group's four other top executives make from $85,000 to $104,000 per year.

"At the end of the day," Andrews said, "they're getting pretty exorbitant salaries to duplicate the efforts of other people and for more money than the city can do on its own."
Unfortunately the article also contains an irresponsible comment from Roland Dorson, President of the Greater Indianapolis Chamber of Commerce:
This does not put the city in an advantageous position," said Roland Dorson, president of the Greater Indianapolis Chamber of Commerce. "Along with the benchmark cities, we compete globally with places like Melbourne or Vancouver.
It's about our brand -- how do we continue to promote that?"
It should be noted that Dorson has also promoted the continued irresponsibility of the Capital Improvement Board as well as additional tax increases on businesses to pay for that irresponsibility, including the Council voting to give Indianapolis the highest combined hotel/sales tax in the country. One wonders how well Dorson is representing his constituency.

Although presented with an ideal opportunity to note IDI"s inefficiencies and lavish spending on salaries and benefits, Paul Okeson chief of staff to Indianapolis Mayor Greg Ballard, instead notes the "important partnership" the City has with IDI and suggests that the continued funding of tax dollars to IDI would continue if the economy were in better shape.

Asking that groups like Indianapolis Downtown, Inc. and the Arts Council of Indianapolis, Inc. be responsible stewards of taxpayer money, is not "shortchanging" Indianapolis. We should not be simply handing over money to these organizations and then doing no oversight whatsoever while those organizations pay themselves lavish salaries and benefits. Nonetheles, IDI should not be receiving any tax dollars. IDI's funding should come from the downtown businesses it purports to help. Most likely though those businesses would see IDI for the bad investment it is if asked to fork over significant dollars to support the organization.

See also:

Monday, June 8, 2009 Taxpayers Spend Millions to Subsidize Indianapolis Downtown, Inc.; Meanwhile Non-Profit Corporation Hoards Cash and Pays Lavish Salaries

Tuesday, July 7, 2009 Indianapolis Downtown, Inc. Picks Taxpayers' Wallets While Patting Itself On The Back


Advance Indiana said...

The views of the Indianapolis Chamber of Commerce is a continuing mystery to me, Paul. Suffice it to say, they are not on the side of taxpayers when it comes to matters of taxation and spending by our local governments.

jabberdoodle said...

Paul - the $1.1M total already includes the Bond Bank's contribution. It was my understanding that the usual $60,000 from Indy Parks for lighting the downtown street trees was not going to be awarded for 2009, so I was surprised to see Okeson's comment in that respect. Other contracted amounts for 2009 were DMD for just over $142,000 and DPW for $300,000.

Paul K. Ogden said...

AI, I couldn't agree more. The Indy Chamber is not on the side of taxpayers OR business. I'm surprised they don't revolt given Dorson's continued support of tax increases on businesses.

Paul K. Ogden said...


Thanks for the clarificaiton. I still don't understand the practice of running expenditures through the bond bank. What does IDI have to do with the bond bank?

jabberdoodle said...

Paul - the bond bank accumulates money that it can expend without approval of the Council. I doubt its more complicated than that. Under Peterson it charged higher fees and would accumulate more cash reserves than under Ballard, but otherwise it is the same, convenient source of ready money.