Tuesday, July 20, 2010

Is The Transfer of City Real Estate to Citizen's Legal?

One thing I've learned about Indianapolis politics is that both Republican and Democratic administrations do things that aren't always strictly legal. I was reminded of this when another blogger chided the Democratic council members for failing to have good legal advice on their proposed amendments to the transfer of the city's water and sewer utilities to Citizens' Energy.

Those living in glass houses shouldn't throw stones. For the first 2 1/2 years of Ballard's administration, City Legal suffered with highly inexperienced attorneys like Chris Cotterill (5 years legal experience when appointed head of City Legal) and Jonathan Mayes (2 years when appointed as head of litigation) playing key leadership roles. That situation appears to have finally been addressed with new, more experienced leadership at City Legal.

Back to the utilities transfer, er sale. I wonder if the Ballard administration's attorneys have thought through all the legalities of the deal. In the final draft of the plan, it came out that transfer of ownership of Geist Reservoir, Morse Reservoir, the Central Canal and the Canal Towpath, from the City to Citizen's Energy was part of the deal.

But what of the municipal property disposal rule that governs the sale or transfer of property city property? The rule in IC 36-1-11-4 requires an appraisal, notice of the intended sale and bidding. If the property is worth over $50,000, the sale or transfer has to be approved by the Council. While the approval of the Council will be forthcoming, what about the lack of an appraisal and a lack of bidding?

The "disposal of a municipally owned utility under IC 8-1.5" is specifically excluded from the property disposal rule. However, if you look at IC 8-1.5, you will see that article does not apply to consolidated cities which, of course, Indianapolis is.

I've been around the law enough to know that the Indiana Code has many twists and turns. I assume the City's lawyers have done their homework and this transfer, er sale, of the utilities won't be subject to legal challenges. Then again, you would have thought the City's attorneys would have reviewed the Early Termination provision in the Pacers contract more closely before handing the billionaire Simons $33.5 million of our tax dollars and that never happened. So maybe I shouldn't assume.


Blog Admin said...

City Legal hasn't lifted a finger on this, Paul. Bakers and Daniels have handled it all, and considering they're one of the most well connected and largest law firms in town, they should know better.

Jon said...

The documents on the CIB site for the Pacer's deal still contain the loan phrasing and loans to a private enterprise aren't legal. One wonders if Indiana law is not applicable to Indianapolis.

Paul K. Ogden said...


One thing I've learned in practicing law is that the attorneys at big law firms are rarely any better than other attorneys in town and often worse. The big firms just have better connections.

Trust me, no lawyer at a small firm starts quaking in his or her shoes because a Barnes & Thornburg, Baker and Daniels, Ice Miller attorney is on the other side. It makes no difference to us.

Unigov said...

Paul - there has been an appraisal.

Geist Reservoir is appraised at just under $4 million.

I am not making this up. The documents are in the special site set up, and the appraisal is called "2010-Appraisal_Report_by_RW_Beck.pdf"

Paul K. Ogden said...

Thanks, Unigov. I'll look it up. What about the other properties?

Unigov said...

All the properties are listed in the appraisal, if that's what you mean.

Basically the city can do whatever it wants and nobody can stop them.

Citizen Kane said...

My only hope (slim and none) is that the IURC will put a stop to the city stealing money from ratepayers to pave streets and keep engineering firms and contractors and there campaign coffers full for the next few years.

By the way, I was at the Utility Transfer Meeting on the 19th, and the room full of greedy suits rubbing their grubby little hands together waiting to dive into the money pot made me want to put a gun to my head. Oh, I don't get me started on the WBE / MBE nonsense that certain people were focused on.

It was somewhat humorous to listen to a Citizen's representative, in answering a question about guaranteeing savings, that inflation or even hyperinflation could not be discounted, therefore, it would be improper to include a savings guarantee in the deal. Well, no joke, some of us already knew the savings were bogus projections designed to propagandize the masses and serve as cover for their thievery.