Thursday, September 30, 2010

City Threatens Bakery in City Market With Religious Discrimination: City Exposes Taxpayers to Expensive Litigation if Lease is Cancelled

Let me get this out of the way first. I don't support discrimination because of sexual orientation. I have written on this blog that I don't have a problem with same sex marriage and that committed relationships resulting in marriage is something we should be encouraging regardless of sexual orientation. (I don't get how same sex marriage in anyway threatens traditional marriage.) I also strongly support the end of the military's "don't ask, don't tell" policy.

Having said that, the Indianapolis Star reports (with a terribly misleading headline on the online version of the article) that the City is threatening to terminate "Just Cookies" lease because the bakery refused to fill a special order for rainbow cupcakes for use at a "Coming Out" event. The owner David Stockton said he had moral objections to the cause and passed on filling the order. Stockton's wife, Lily, also pointed out Just Cookies don't bake cupcakes or fill special orders. But it was the Stockton's comments that the City has zeroed in on ... and that's the legal problem.

When talking about constitutional provisions relating to religion, everyone thinks of the Establishment Clause. People overlook the fact though that the First Amendment actually contains TWO religion clauses...the other one being the Free Exercise of Religion Clause.

The Free Exercise Clause has been interpreted to mean that government must accommodate religious beliefs and activities even on publicly-owned property. If the City terminates the lease because of Mr. Stockton's religious beliefs then it will quite likely be found to have violated Mr. Stockton's free exercise rights. In short, the City would be sanctioning Just Cookies for alleged sexual orientation discrimiantion by discriminating against Just Cookies based on the religious beliefs of at least one of those owners. The problem for the City is that religious discrimination is prohibited by the United States Constitution.

In looking at cases interpreting the religous clauses, you get into a lot of gray area. In this case, though we're not talking about Just Cookies turning away a homosexual customer who simply wanted to buy a cookie. Instead this situation involves the City taking the position that "Just Cookies" was required to fill a special order, for a product that they don't even produce, for a cause the owner of the business doesn't morally agree with. It is not a close question. It's flat out religious discrimination, prohibited by the Free Exercise Clause.

Robert Vane, the City's spokesman pointed out that the City has an ordinance that prohibits sexual orientation discrimination. Well, an ordinance doesn't trump the U.S. Constitution. Nonetheless, there is reasonable middle ground to read the ordinance and constitutional provision harmoniously...that "Just Cookies" is required to serve customers regardless of sexual orientation, but that the company can't be required to fill a special order, for a product they don't produce, for an event that an owner of the company doesn't morally believe in.

The silliness of the City's position is illustrated by looking at an analogy. What about a Catholic pro-life owner of a City Market business that is approached by a pro-abortion rights group to cater an event in support of that cause? Is the City going to make that business owner cater the event despite his moral belief against abortion? It is exactly the same principle.

Mr. Stockton's views are not above criticism. That's the beauty of our political system - we can criticize and boycott businesses when we don't agree with the positions that those business owners take. And I don't at all agree with Mr. Stockton's views regarding "coming out." (I think we need to be more tolerant and to encourage people to fell free to come out regarding their sexuality.) But Mr. Stockton has every right to hold his own moral views and to refuse to fill an order for a cause he doesn't believe in. That right is protected by the Constitution and it would behoove the City to get some good legal advice before it cancels the lease and quite likely immerses the City in expensive litigation.

Standing up for Mr. Stockton on this issue isn't standing up for what he believes in. Rather it is standing up against religious discrimination and religious intolerance that seeks to use the power of government to force one to hold the "correct" beliefs about a political and moral issue. The City thinks it is attacking discrimination by targeting Just Cookies. But what is being suggested is that moral views that result in discrimination be attacked by imposing another form of discrimination, religious in nature, a discrimination forbidden by the United States Constitution. People need to speak out against this sort of discrimination, because next time it will be other moral beliefs that are the target.

Finally, I would point out that this is once again an example of a Republican Mayor who doesn't understand or care about the views of traditional Republican constituencies. The Mayor has taken aim at gunowners with repeated statements and positions against gun rights. He has alienated the tea party fiscally conservative constituency who helped him get elected with his continued support of tax and fee increases (which now apparently total over 100) and his ceaseless corporate welfare schemes.. Now the Mayor is targeting religious conservatives who, with the exception of gun rights activists, is the most loyal Republican group out there. Do these people advising the Mayor have any understanding of political strategy whatsoever? Constantly alienating your political bases is a politically fatal strategy.

Wednesday, September 29, 2010

Democrats Roll-Out Anti-Mayor Ballard Commercial; Strategy is to Tarnish All Republicans With Ballard Political Missteps

I've been complaining about this for about two years now...those offering political advice to Indianapolis Mayor Greg Ballard are 1) incredibly stupid; 2) or couldn't care less whether he or the Republican majority on the Council is re-elected. Ballard has taken actions that have set up the Democrats beautifully on issue after issue, apparently a fact that is not lost on Marion County Democratic Chairman Ed Treacy. Treacy must be so giddy that he couldn't wait until 2011 to start rolling out the anti-Mayor Ballard ads. His strategy is clear...he's going to use the Mayor foolish political moves to tarnish ALL Republican candidates.

Tweaking Parking Agreement Does Not Change the Political Equation for Mayor or Republican Councilors

The Indianapolis Star reports that the City is considering "tweaking" the 50 year one-sided ACS parking agreement to make it, supposedly, less one-sided. The fact is that tweaking would not change the political equation and that's a big problem for Republicans..

Since the City released the details on the ACS parking deal, it has faced an enormous public backlash, so much so that no Republican councilor or administration official in support of the plan would defend it on the Fox 59 "Face Off" segment.

No matter what is tweaked on the contract, the public perception is that this is a one sided deal that mortgages the future to make a political insider wealthy. That public perception is set in stone and will be with it regardless of what is changed on the contract.

By continuing to pursue this deal despite the obvious negative perception of it, the Mayor's re-election and the Republican majority on the council is placed in jeopardy. That people like Joe Loftus, Ryan Vaughn and Tom John would continue to insist that Republicans support this loser deal shows that they put their own self-interest ahead of the welfare of the party.

Monday, September 27, 2010

Mayor Ballard Promises Millions More in Taxpayer Dollars to Subsidize Private Development at Expense of Libraries, Public Safety, Parks & Bus System

I think we've entered a dangerous period with the profiteerers within the administration of Indianapolis Mayor Greg Ballard so control the administration they are likely to try to push through any proposal no matter how outrageous and damaging those proposals are to the Mayor's re-election effort.

Just recently it was announced that Indianapolis' libraries were cutting hours to save $15 million dollars and public safety was undergoing significant cuts. That comes on the heals of the budgets of the Parks Department and the city's bus service getting slashed.

The news out of the 25th Floor today is astonishing. The administration has decided to pick up $86 million cost of a private development that private lenders have refused to finance as being an unwise investment.

The Indianapolis Star reports:

Indianapolis officials will finance most of the cost of a $155 million project to build a hotel, apartments, retail space and an office incubator building on land donated by Eli Lilly and Co. on the south edge of Downtown.

"This is a great project. It's an innovative project," Mayor Greg Ballard said today as he announced the project with developer Buckingham Cos. of Indianapolis and Lilly officials.

The Indianapolis Star reported in June that the Indianapolis developer was talking with the city and Eli Lilly and Co. about building a hotel and conference center with retail stores, apartments and a fitness center next to Lilly's headquarters campus Downtown.

The 10-building project, tentatively called North of South, will spread over 14 acres along South Street, bordered roughly by the rail tracks on the north, Virginia Avenue on the east and Delaware Street on the west. Groundbreaking is planned for late this year, with construction lasting about 2 years.

The 152-room hotel will be a high-end Dolce brand hotel that specializes in corporate bookings. It might open in time for the 2012 Super Bowl in Indianapolis. Plans also call for about 320 apartments, 30,000 to 40,000 square feet of retail space and 10,000 square feet of office space that will be leased to life-science-oriented start-up companies.

Buckingham President Bradley Chambers had said in June that the project could serve three nearby corporate campuses -- including health insurer WellPoint and Indiana Farm Bureau Insurance -- that lack nearby services to support them. Neither WellPoint or Indiana Farm Bureau Insurance would move offices to the site, though, officials at today's event said.

The YMCA of Greater Indianapolis also will build a 75,000-square-foot fitness facility to add to the services already offered Downtown and in surrounding neighborhoods.

The city will finance about $86 million of the cost by floating bonds guaranteed by revenues from the Downtown tax increment financing district, said Deron S. Kintner, executive director of the Indianapolis Bond Bank.

The bonds would be paid off over 25 years using rents and other income from the project, plus property taxes from the project, he said.

The city got involved in financing the project because private banks and other commercial lenders have largely pulled out of the market for new commercial development, he said.

To see the rest of the article click here.

Let me reiterate - the private sector found the project too risky and failing to provide enough of a return to make the development worth the investment. Yet Ballard administration officials feel competent to second guess the private sector on what is a risky investment and will turn a profit.

I guarantee you that if you look closely at the Lilly development you will find insiders and big law firms cashing in at the expense of our naive Mayor's re-election effort.'

Advance Indiana has an excellent take on this subject.

The Mayor's Road Construction Signs

The re-election strategy of Mayor Greg Ballard is to mortgage the future in order to fund massive infrastructure improvements leading up to the 2011 election. I predicted that every construction site would have a sign touting the effort, along with the name of the name of the Mayor of course. Sure enough, those signs are springing up all over the city.

Even this strategy may be ill-conceived. People like infrastructure improvements. They hate the detours, road closings and traffic backups associated with road construction work. A sign at every construction site might actually be a negative - reminding motorists of exactly who is responsible for their inconvenience.

A perfect example of that inconvenience is the intersection at 38th Street and Lafayette Road on the northwest side. About 6 of the 8 lanes on 38th Street are closed leading up to one of the busiest intersections in the State. I have driven to that intersection during non-rush hours and seen it backed up for a half mile. I can't imagine what it's like during rush hour. I'm sure too the folks on Guion Creek Road don't appreciate all the traffic that is detouring onto that road to avoid the traffic at that intersection. Guion Creek Road has for years been one of the worst-maintained roads in the City. The road is filled with pot holes and broken pavement. Traveling on a gravel road would be smoother than driving on Guion Creek.

Can you imagine if Bart Peterson launched this strategy right before the 2007 election? Republicans would be screaming bloody murder over the signs. One wonders if the Republicans will complain when the abuse of tax dollars to promote a Mayor's re-election is done by a Republican?

What is the Republican response when, inevitably, the price of the signs gets discovered and the Democrats start complaining about the Mayor using tax dollars to promote his re-election campaign?

Hat tip to Indianapolis Times who picked up on the sign.

Saturday, September 25, 2010

Fox 59 Cancels "Face Off" When Advocates For Parking Deal Refuse to Participate

Fox 59 tried to set up a "Face Off" on the issue of the ACS deal. However, no administration official or council Republican would participate. This includes Mike Huber, the City's lead spokesperson for the deal. Finally, Fred Loughlin, a Vice-President of Indianapolis Downtown, was lined up to speak for the parking proposal. IDI, for those not familiar, is a non-profit which receives millions from the City, and in exchange, which rubber-stamps anything the administration chooses to do and leaves the false impression the "business community" supports those decisions. The Ballard administration though pulled the plug on Loughlin's participation in the segment. With no participation from the pro side, the segment had to be cancelled.

The whole scenario speaks volumes about the political unpopularity of the ACS 50 year no bid parking contract.

Yet, the fact the parking proposal is a clear political loser, it continues to be pushed. Today's Indianapolis Business Journal published a "letter to the editor" from Huber touting the deal. How pathetic is it thatat there are no "regular folks" willing to write a letter to the editor supporting the deal. Reading Huber's half-hearted effort in the IBJ, it appears that even his enthusiasm for the deal is gone.

Will ACS supporters (i.e. Loftus, Huber, etc.) finally admit they made a mistake and withdraw the proposal? Or will they instead insist that Republican councilors (and the Mayor) fall on the political sword, by twisting enough arms and making enough threats to get Council Republicans to approve the highly unpopular deal?

Thursday, September 23, 2010

Marion County Prosecutor Carl Brizzi Defends Student Loan Repayment Program; Ignores Realities of the Attorney Job Market

The Indianapolis Star reports:
Marion County Prosecutor Carl Brizzi said whoever succeeds him next year will have a tougher time finding talented young lawyers if city officials don't find a way to keep a student loan repayment program in the 2011 budget.

"The student loan program concerns me the most," Brizzi said Wednesday after a hearing before the City-County Council's Public Safety and Criminal Justice Committee. "We're asking lawyers to take a $2,200-plus pay decrease. That's a pretty significant hit when you're making $45,000 a year."

...

Under the loan repayment program, deputy prosecutors receive about $2,200 a year to make payments on their student loans. Law school is expensive, Brizzi said, noting most newly hired prosecutors are saddled with student loan debts of $100,000 or more.

The cut would mean 98 of the county's 168 prosecutors will have to find other ways to repay their student loans next year, Brizzi said. The move likely would force some talented prosecutors to take better-paying jobs with private law firms, he said.

The loan repayment program costs about $170,000 a year, Brizzi said. The prosecutor's office is trimming about $460,000 from its 2011 budget of $23.6 million.

Brizzi, a Republican who will leave office when his second term ends at the end of the year, said he wrote about the possible effect of cutting the loan repayment money to the men hoping to win his job in the Nov. 2 election -- Republican Mark Massa and Democrat Terry Curry.

City-County Council President Ryan Vaughn, a former deputy prosecutor, said the student loan program helped him repay some of his student debt of about $80,000. Vaughn said he would try to find a way to fund the program in the final budget.
To see the rest of the article, click here.

While I can't blame Prosecutor Brizzi for fighting for better pay for his staff, he grossly misstates the realities of the legal job market. The fact is that a $45,000 salary with government benefits straight out of law school is a far better employment situation than most new lawyers receive.

When I graduated from law school in 1987, law firms provided the best salaries. The situation has changed dramatically. Public sector attorney pay have risen while the pay in the private sector has remained flat for 20 plus years. Private law firms remain notoriously bad about paying benefits.

The fact is there are plenty of law firms paying associates salaries of $30,000 to $35,000. It's gotten even worse though - some law firms will not even pay a salary or hourly rate - they'll just pay the associate a portion of whatever legal fees he or she is able to bring into the firm. Recruiting new clients and getting paid by them can be a very difficult thing for a new attorney with little in the way of legal contacts. As a result, associates can find themselves working at a law firm for months, making only a few thousand dollars during that time.

The notion that the Marion County Prosecutor's Office is facing stiff competition for new attorneys from law firms is laughable for anyone who knows what the job market is really like for attorneys. So, on the one hand while I applaud Brizzi for standing up for his attorneys, the fact is he's being very dishonest when he says the student loan repayment program is needed to prevent attorneys from leaving his office to go to private law firms.

As a side note, I found Ryan Vaughn's comment interesting. Here's a guy who had no problem cutting the law library out of the budget, even though the library was of vital importance to the public and downtown lawyers. Vaughn continues to show how out of touch he is with real practicing attorneys.

The Cancer In the Marion County Republican Party

The unpopular ACS parking deal is quickly becoming the Republicans' version of former Mayor Bart Peterson's COIT tax increase just months before the 2007 election. At least though with the COIT increase there was the claim that it was needed for a good cause - public safety. The ACS parking deal appears to the public, and to experts who have examined the deal, to be a horribly one-sided deal that makes a politically-connected contractor wealthy while giving the taxpayers the shaft

I'm not surprised by the public firestorm against the deal. What I do find noteworthy, and troubling, is that, despite the unpopularity of the proposal and that it could doom Ballard's re-election and the Republican majority on the Council, the deal is still being pushed forward. That to me speaks volumes about how much certain insiders care about Republican success in the 2011 municipal elections.

Starting Election Night November 6, 2007, insiders began scheming to get close to the man who was elected running as an outsider. During his victory speech, Ballard even talked about ending "country club politics" in Indianapolis. Just weeks later those who actually worked for Ballard's election were shocked to find themselves locked out of the transition by Barnes & Thornburg partner Bob Grand. Several told me that when they complained to Mayor-Elect Ballard he responded saying he was couldn't do anything. Ballard said he had signed a contract with Barnes & Thornburg to do his transition and that, in exchange for doing the transition for free, he had agreed not to interfere with the decisions that were made. Given how incredibly naive Ballard was, and still is, about politics, it is a very believable story.

It could have been different. Instead of using the Mayor's election to make themselves and their friends wealthier, the political operatives who took over the Ballard administration- people like Grand, Joe Loftus and GOP Chairman Tom John - could have used the surprise victory to help rebuild the Republican party locally. The election of populist candidate Ballard gave the local GOP the perfect opening to make the party more appealing to working men and women, the so-called Reagan Democrats that helped the Gipper win two landslide elections. The Republican Party in Marion County simply cannot win elections any more running as a 1990s elitist, country club organization in a solid majority Democratic county. The Goldsmith days are over.

The people who sold out the Marion County Republican Party, the people who chose profits over helping a political novice govern, need to hit the door. Their selfish acts will have set back the fortunes of the Marion County Republican Party by 20 years. People like Grand, Loftus and John are nothing more than a cancer to the party, a cancer that needs to be cut out out if the Marion County GOP is going to have any chance to survive and thrive in the future.

Wednesday, September 22, 2010

Nuvo Calls Out Indianapolis Star For Ignoring "Sleaze" of ACS Parking Deal

It's a shame Nuvo's news editor Austin Considine doesn't have the resources that the Indianapolis Star does. If he did, he'd give that daily a run for its money. On Wednesday, Considine blogged about "sleaze" in the ACS deal and facts the Star conveniently overlooks:
Recent reporting by bloggers and the Indiana Business Journal has underscored another sleazy connection between ACS, the company chosen by the Ballard administration to take over city parking, and — well, the Ballard administration.

The connections between ACS, a Xerox-owned company based in Dallas, and Indiana politics is a subject we've explored here at length (for just one item from of our past coverage, read here). In brief, ACS was a key subcontractor that ran calling centers and other things when Mitch Daniels tried (and failed) to privatize state welfare — a $1 billion-plus deal with IBM that was, ultimately, a complete disaster.

Even after Daniels fired IBM, ACS was kept on as a subcontractor. Critics, including us, pointed to the fact that the head of Indiana's Family and Social Services Administration (FSSA) at the time, which handles state welfare services like food stamps, medicaid, etc., was none other than Mitch Roob — a former high-level executive from ACS. Roob, despite having helped engineer a deal that cost the state hundreds of millions of dollars, got promoted to head of the Indiana Economic Development Corporation.

Now the city of Indianapolis wants to hire ACS to take over its parking meters and some lots and garages for 50-years, in a no-default
contract. It begged a lot of questions to say the least.
Considine then goes on to quote my blog for having pointed out what is public record yet steadfastly ignored by the Indianapolis Star - that Joe Loftus, who is on the public payroll as an adviser to the Mayor and lobbyist for the City, also lobbies for his client, ACS. Cue the sarcastic Saturday Night Live Church Lady line: "How convenient." Loftus was directly involved in the hiring of all the top people on the 25th Floor, including Michael Huber, lead negotiator on the ACS deal, yet now we're supposed to believe Loftus had no influence regarding the selection of his long-time client, ACS, for a 50 year no bid contract. I recall the words of former State Republican Chairman Rex Early's response when asked to accept some BS he was told as true, "I was born at night, just not last night." How stupid does Loftus think we are?

Returning to Considine's blog post he illustrates how in a story in today's online Indianapolis Star, the newspaper went out of their way to avoid mentioning how much money ACS profited from the failed FSSA deal:

...New numbers have emerged with regard to the failed IBM deal, showing that the state spent $500 million on the failed deal, $442 million of which has gone directly to IBM as of the end of August.

Guess where another $59 million has gone? That's right. To ACS. But you'll find no mention of that in The Star. They punted on the issue instead. The Associated Press copy published in the Star buried the detail in the last paragraph, with no mention of ACS by name.

..

"Nearly $59 million has gone to IBM subcontractors who now work directly for FSSA. "

My impression of the Indianapolis Star is that there is considerable frustration at the daily because the days when the Star dictated what was news in the City is gone. Blogs, publications like the Indianapolis Business Journal and a revived Nuvo news department under Considine, as well as television reporters who are doing more lengthy, investigative pieces made possible by longer local news broadcasts, are usurping the Star's role as newsmaker. That's not to say the Star is dead. They're are a lot of very talented writers at the Star who would love to do hard-hitting, quality news reports. Instead of censoring the news to try to fit an agenda, perhaps the Star editor Dennis Ryerson should turn those writers loose to do what they do best - report the news. That's in fact what IBJ does. IBJ's editorial position does not seem to at all impact the reporting of facts in IBJ news stories. That's as it should be.

Tuesday, September 21, 2010

City Promotes Salaries of 200 Jobs Promised by ACS; Agreement However Does Not Mention Salaries

The Indianapolis Business Journal reported today:

A proposal to lease the city’s parking meters for 50 years would require the vendor to bring 200 jobs to Indianapolis for at least seven years.

City officials this week begin touting that part of the agreement with Dallas-based Affiliated Computer Services Inc., as the deal increasingly becomes a subject of heated debate.
...
According to documents published Monday on the city’s website, the 200 jobs would include call center and data entry positions, information technology workers and managers.

The salaries and benefits would be “market-competitive to similar positions in Indianapolis,” which ACS put in the range of an annual $16,000 to $40,000 for data entry and call center jobs and $45,000 to $95,000 for the information technology and managerial roles.

To see the rest of the article click here.

I recall reading another published report today that Mayor Ballard suggested the average salary of these 200 jobs would be $50,000. Apparently, that figure was arrived at by averaging the highest and lowest salaries ACS suggests such workers might be paid.

Let's forget for a second that the ACS parking contract has an "incorporation clause" which says agreements outside the contract are invalid. A review of the Agreement posted on-line raises other troubling questions and concerns.

First, as someone who use to review business documents for real estate closings, there are some red flags with the Agreement, which is nothing more than a four page letter from ACS to the Mayor's Office. Although the Agreement purports to be from ACS, it is not on ACS letterhead. Rather it looks like someone simply typed it up with an ACS's name and address at the top. Surely, ACS could afford letterhead for such an important document.

Second, if you look on page four, you will simply see a scrawled signature for person who signed it on behalf of ACS. No printed name of the person, no title. I could not let a real estae closing go forward unless I knew exactly who signed that document and his or her title. If you don't know that information, you don't know if the person had the authority to sign. I don't know why the Jobs Agreement with ACS would be any different.

Finally, the document is signed by Michael Huber. Huber is only a Deputy Mayor and wouldn't have the authority to sign unless he was given that power by the Mayor.

Moving on from those housekeeping items, it should be noted that despite the spin by the City and ACS about the salaries that woudl be coming to Indianapolis there are no salary promises in the Agreement. (Nor are there promises about minority jobs in the Agreement, an omission which belies the efforts of the City and ACS to get the votes of African-American councilors by pandering to them on the issue of minority jobs.) Rather here is what it says about the jobs ACS was promising:
"The Jobs include, without limitation, call center positions, data entry jobs, technical and information technology roles, and/or management positions. The Jobs shall pay wage and benefit packages that are market-competitive to similar positions in Indianapolis, Indiana, and include benefits consistent with ACS' overall corporate practice."
There are no salaries in that language or anyplace else in the agreement. In fact the jobs aren't even required to be full time. ACS could simply offer 200 jobs for one day a week and fulfill the Agreement.

There is a penalty for if ACS doesn't provide the jobs...a whole $2,000 a year. As Urbanophile's Aaron Renn pointed out in a comment to the IBJ article, that is less than the price owed by the City to ACS for taking out one parking meter.

Then again, the City would never know if ACS were living up to the agreement in order to impose that fine because as in the Parking Contract, in the Agreeement (bottom of page 1) the City is leaving it up to ACS to provide the calculations on how many jobs it provided and ACS's penalty. How convenient.

On page two, ACS also promises to pay $25,000 per year to "community organizations with a focus on downtown Indianapolis, Indiana." What do you want to bet that that money ends up in the pocket of Indianapolis Downtown, Inc.? Am I too cynical to see a connection between this $25,000 annual payoff, er, donation, and IDI's support of the ACS parking agreement, support that in fact directly flies in the face of many downtown businesses IDI claims to represent?

Does the administration really think people are so stupid as to not see this one-sided deal for what it is - insiders trying to use their positions in the Ballard administration to enrich themselves and their clients?

Monday, September 20, 2010

Star's Editor Dennis Ryerson Sees Pure Ballard Adminstration Motives in Proposing Parking Contract, Attacks Bloggers for Just Producing "Noise"

Some of you may have missed Indianapolis Star editor Dennis Ryerson's column this weekend. In the column, Ryerson argues that the deal deserves close scrutiny. A more sarcastic me would say that's patently obvious. We are, after all, talking about a 50 year, no bid, no cancel contact in which the vendor is set to make as much as $1.2 billion.

What caught my eye though was Ryerson's statement:
For starters, there are no dishonorable entities here. The administration of Mayor Greg Ballard is hardly a cesspool of political patronage.
Ryerson then goes on to take a shot at bloggers, saying most are more about "noise" than substance.

The sad truth the Star wants to selectively present the facts, apparently to support a particular political agenda. The Star's editors get nothing short of angry and frustrated when bloggers, the Indianapolis Business Jouranal and television reporters don't shy away from objectively reporting facts, a job that used to be a function served by the Star.

Take the comment that the Ballard administration isn't a "cesspool of political patronage" and the suggestion that Ballard administration officials have pure motives in proposing the deal. The reference to "political patronage" is unfortunate. I should hope that a Mayor fills his administration with people of his or her own party. This isn't about political patronage, rather it is about self-interested insiders within the Ballard administration putting forth deals to enrich themselves or their clients at the public's expense.

Joe Loftus, a partner at Barnes & Thornburg, is on the City's payroll to render advice to the Mayor and lobby for the City. He also represents ACS the company that received the parking contract. (If you look up the city's lobbying registration's website, it's right there.) Loftus sits in on regular meetings with the Mayor.

One would think the Ryerson's Star would be all over pointing out this conflict. Nope. Not a word from the Star. In fact, the Star has done no detailed reporting on the ACS parking contract. Rather it's been the Indianapolis Business Journal, television news reporters and, yes, blogs, which have exposed the details in the parking contract.

While Ryerson critizes the blogs, he might consider why they are popular. The reason is that blogs are providing facts and details his own newspaper refuses to publish, apparently because those facts don't fit what the Star's editors want the story to be.

I do not believe the blogs are in any way a substitute for a quality newspaper. But if blogs makes the local newspaper return to doing its job of reporting the news objectively and without a political agenda, more power to them.

Saturday, September 18, 2010

"Leveraging the Marketplace?" Are You Kidding Me?


I just heard the audio of Councilor Mike Speedy's appearance on the September 13, 2010 Greg Garrison show. On the show he talks about how the ACS parking deal is a good one because the City is "leveraging the marketplace" through the ACS contract. Are you kidding me?
The parking contract was not bid out. Barnes & Thornburg parner Joe Loftus, who is a paid legal advisor to the mayor and paid lobbyist for the City, also lobbies for ACS according to the City's lobbying registration website. The ACS contract is for 50 years with no right to cancel for the City.
Pray tell, Mike, where does that "marketplace" competition you refer to come into play? The deal, in fact, shields ACS from market competition by creating a legalized monopoly with no protection for Indianapolis taxpayers whatsoever.
In its print edition, the Indianapolis Business Journal today reported how similiar the Indianapolis deal is to Chicago. The Chicago deal killed off the political career of Mayor Richard Dailey. Do Republicans like Speedy really want to go down that political road?

Friday, September 17, 2010

Ballard Administration Appears to Be Imploding; Is Mayor Ballard Reconsidering a Run for Re-election


One would think the Officer Bisard incident would represent the low point of the administration of Indianapolis Mayor Greg Ballard. Then things got worse:
  • The Ballard administration introduced the ACS parking meter deal, a highly unpopular proposal which has been roundly criticized by both Republicans and Democrats. City officials have no credible answer as to why the City can't buy the meters themselves, raise the rates, and keep all the money, instead of the 20% in the deal. The deal looks an awfully lot like an insider deal to make ACS a ton of money (as much as $1.2 billion according to the Indianapolis Business Journal.) Mayor Ballard apparently had no idea that Joe Loftus, Barnes & Thornburg partner and a paid lobbyist for the City, was also representing ACS. I haven't heard anyone dispute that Loftus was working behind the scenes to get his client, ACS, the deal.

  • Then the same time it is announced that the CIB was spending $1.6 million for new electronic signage at Conseco so the Pacers can make more money, the library board announced closing libraries on various days throughout the City, a plan that would help close the library deficit by $1.5 million.

  • Then it came out that the City agreed to funnel $8 million in property tax revenues to the CIB, just a couple months after the CIB promised to give the Pacers $10 million more per year for being so gracious as to occupy the Fieldhouse and keep all the revenue from running it. Hmmm, I seem to remember the Mayor saying no property tax revenue would be going to the Pacers. What are the odds that the Mayor has been kept so in the dark, he didn't know about the deal to give the CIB $8 million in property taxes? Oh, and again, this was all happening at the same time the library closings were announced.

  • Frank Straub apparently continues to act as an out-of-control egomaniac at Public Safety. Instead of taking prompt action to correct an obvious mistake in appoint Straub, Mayor Ballard has apparently decided to keep him on so he can cause even more political damage to the administration.

There is a common theme among these examples. They all represent a Mayor who is not in control of his own administration. Mayor Ballard would be wise to rethink running for re-election given the events of the past couple weeks.

Hypocrisy, Thy Name is Ryan Vaughn


Gary Welsh of Advance Indiana beat me to the punch in noting the hypocrisy of Council President Ryan Vaughn in his comments about former Councilor Lincoln Plowman ethical problems which resulted in the recent federal indictment. Here is what Vaughn told the Star reporter:
"It's a matter of personal integrity," Vaughn said. "You either have what it takes to hold office or you don't. . . . It's an issue of personal character. If the allegations are true, then no, he should not hold public office."

Vaughn said Plowman's alleged actions reflect only on himself.

"Unethical people will commit unethical acts," he said, "and ethical people will abide by the rules."
Ryan Vaughn complaining about someone's ethics is like John Dillinger calling Al Capone a crook. I couldn't say it any better than Gary Welsh did on his blog:
Does Vaughn actually believe he is more ethical than Lincoln Plowman? As soon as the Republicans gained control of the council, Vaughn, whose mentor is Carl Brizzi, traded on his status as a councilor for a high-paying job as a lobbyist with Barnes & Thornburg, a law firm that is paid big bucks for legal work by the Ballard administration at the same time the law firm lobbies for a variety of interests before city-county agencies. He refuses to recuse himself from matters that clearly benefit his law firm and its clients and actually takes a direct role in steering initiatives through the council that impact his law firm or its clients. I agree with Vaughn it's an issue of personal character, but he must have a pretty twisted concept of what it means to be ethical.
A few years ago Republicans complained, correctly, about Council Monroe Gray's ethical problems. Yet Republicans tolerate conduct from Vaughn that is even worse. For example, Vaughn has not only refused to recuse himself on the consideration of the ACS parking contract, he has publicly argued in favor of the the deal, a deal which will enrich a B&T client by as much as $1.2 billion.
Vaughn's conflicts-of-interest and support of insider dealing in the administration are as unethical and much more damaging to the public interest than anything Plowman has thus far been reported as doing.

Thursday, September 16, 2010

The Saga of Congressional Candidate Marvin Scott and Campaign Manager Stan Solomon

I haven't written anything on the biggoted tweets of Marvin Scott Campaign Manager Stan Solomon. Other bloggers have covered the subject so well, frankly there hasn't been a need. I though don't want people though to think I had no problem with the direction of the Scott campaign and the comments of his campaign manager.

Let me just link to Jon Easter's blog on the subject and say "Ditto."

"All 911 Operators are Busy, Please Hold"

I was teaching tonight when a student frantically knocked on my classroom door. It seems a fellow student was having a seizure and he wanted to know where the medical services for the campus was located. I had a student give him a phone to call 911.

The phone rang and rang until he eventually got a recording that all 911 operators were busy and he'd have to hold. He gave up. Instead we looked up the number for campus police which then contacted emergency medical services.

I hope I don't have a heart attack while teaching. I wouldn't want to rely on a 911 call going through.

Wednesday, September 15, 2010

Blogger Pat Andrews Exposes Agreemnent to Send Property Taxes to the Capital Improvement Board

Pat Andrews, my favorite local Democrat blogger (my apologies to Jon Easter and Chris Worden), uncovered an agreement (dare I say "scheme") by the City through the Metropolitan Development Commission to sent property taxes revenue to the Capital Improvement Board. She has given me permission to post her column in full:
I just got a copy of the MDC / CIB Interlocal Cooperation Agreement that commits $8 million a year from the Consolidated Downtown TIF to the uses of the CIB. While the Indianapolis Convention & Visitors Association is mentioned liberally, it is clearly a straw dog created to validate the $8 million price tag. It was approved by the Metropolitan Development Commission at their September 1, 2010, meeting.

I uploaded the agreement, if you care to review it. The terms of the agreement begin on page 7. Briefly, the agreement is for $8 million annually to be provided to the CIB, and requires 6 months notice
or the agreement will automatically renew year to year.

While the stated purpose of the agreement is "to protect, further, increase and enhance the benefits that result from the operation of the Facilities and the activities of the ICVA", the agreement specifically states that the ICVA is not a third party beneficiary of the agreement.

With this agreement, property tax dollars are now flowing to the CIB. These are new dollars. They amount to $8 million per year on an ongoing basis. The only new expenses of the CIB are the operation of the expanded convention center and the $10 million cash gift to the Pacers. It is completely reasonable to connect these dots and see property tax dollars flowing from the City of Indianapolis to the Pacers.

These property tax dollars could be used to pay off the bond obligations of the TIF district early, or to promote $8 million in new projects. Such a project could even include upgrading parking meters in the downtown area.

But, no. The Pacers are given higher priority by Mayor Ballard, than being fiscally responsible in paying off debt, or fiscally responsible in crafting an upgrade to the parking meter project, or underwriting some other deserving project in the downtown area that would actually make Indianapolis a better place to live. The Council should reject the $10 million gift in the 2011 CIB budget and let the CIB and MDC unwind this agreement.

Tuesday, September 14, 2010

City Gives Pacers $1.6 Million for New Scoreboard While Library Cuts Hours and Budget by $1.5 Million

The Indianapolis Business Journal has an interesting juxtaposition of articles. The first article deals with the Capital Improvement Board, i.e. we the taxpayers, springing for $1.6 million in new interior signage for the Pacers. The signage will include a "ribbon board" that allows scrolling advertisements. Of course, the Pacers will get 100% of the advertising revenue from the new signs.

Next you have an article about the library cutting back hours. The downtown branch will be closed on Thursdays, while other branches will be closed on Fridays or Saturdays. The closings will save $1.5 million.

Does anyone see the connection? $1.6 million given to a billionaire sports owner while $1.5 million in cutbacks are made to services patronized by every day folks. It is all about the priorities of the Ballard administration.

The Politics of the Parking Deal w/Update and Second Update

Yesterday, a number of downtown business owners came out against the Mayor's 50 year parking deal with ACS. Meanwhile Urbanaphile's Aaron Renn posted a reply to the City's response to his critique of the deal.

The failure of this deal can actually be summed up in one sentence: The City has not make a case why an outside vendor has to be brought in to the tune of as much as a $1.2 billion profit, when this is something - the modernization of the parking meters and bumping up the parking rates - that could be done by the City while keep 100% of the profit (as opposed to 20% under the ACS plan.)

While most of the focus has been on the merits of the plan, this blog concentrates on the political equation. Looking to the north, Chicago's parking deal, which is better than Indy's ACS deal in many respects, has made the current administration so unpopular it has ended the political career of an icon of Chicago politics, Mayor Richard Daily.

Yet those around Mayor Greg Ballard, have encouraged the Mayor to go down the same disastrous political road as Mayor Daily right before the election? Why?

It's actually quite simple. The profiteerers have taken over this current administration. They know this is a one-term Mayor and they're going to do everything possible to cash in before he leaves office at noon on January 1, 2012. While in most administrations you would have someone politically savvy at the top who would understand the ulterior motives of those advising him, with Mayor Ballard you have a political novice who has not yet figured out in almost 3 years that he has surrounded himself with a bunch of sharks, people who expect him to lose re-election and have no interest but their own welfare. The parking deal, which appears to be on its last legs, is just the latest, albeit the worst, example of people profiting off of of this politically-naive Mayor.

Harry Truman said it best: "If you want a friend in politics, get a dog." Truman understood that the people he was surrounded by might not have his best interests at heart and not to 100% trust them on what they're doing. It is a lesson that Ballard may finally understand the night of November 8, 2011.

Update: The Star is running a poll on the 50 year parking lease deal. Right now, the poll is 87% against, 13% for. Certainly an on-line poll is not scientifically accurate. Almost certainly 87% is an exaggeration of the percent against the deal. An on-line poll, however, can measure the intensity of one side or another that wouldn't be measured in a regular poll.. When you have 87% saying "no" that's a sign there is an intensity on the side of those who oppose the deal. Why is this important? It means to the "no" side it is a voting issue...those people will cast a vote based on the administration's position issue. For the other side, it's likely not a voting issue. Most likely Mayor Ballard (and Council Republicans) will get the full wrath of those people who oppose the 50 year ACS contract, but will get virtually no people voting for them because they supported the parking deal.

Second Update: I decided to take another look at the poll result at about 4 pm., finding the result had drastically narrowed from 87-13 to about 54-46. Then a funny thing happened. I got back on late Monday night and found out that the margin spread out again, this time by 69-31.

Hmmm, let me see if I can figure this out. You can vote an unlimited number of time on the Indystar website. There is a sudden surge of "Yes" votes between about 9 am. after I posted my observation until about 4:30 pm, when the numbers reverted back to a large spread. Could it be that city workers were instructed to repeatedly vote "Yes" while sitting at their work computers, and when they were off the clock, the "yes" voters were no longer around to cast their votes? Just a working theory...

Monday, September 13, 2010

Cutting Down Trees As a Strategy to Sell a Home?

Several homes in my neighborhood have recently gone up for sale, including my immediate neighbor to the west. That home is on a huge corner lot shaded by big trees. It had been owned by an elderly woman who I suspect has passed away. As her house faced toward another street, I rarely saw her the entire time I've lived in my house.

I came home one day recently to find that the three trees in the front lawn, which seemed perfectly healthy, had been cut down. Next thing I know, there was a "For Sale" sign stuck in the yard. I was baffled why they thought it was a good idea to cut those trees down before putting the house up for sale.

The other day, I met a client out at her modular home on the far Westside to look at damages that had resulted when she had the home moved onto the lot. The lot had one big tree shading it. The tree was perfectly healthy, but my client was upset because she had wanted the mover to cut it down. She was concerned that the tree was going to die and fall on her house. The client is pushing 75. I didn't have the heart to tell her that the tree would probably live many, many years longer than she would. Also cutting that tree would lower the value of her home.

As I've done a lot of real estate law, I have a decent sense of the valuation of houses. People like trees and shade. Unless a tree is dying or is too close to a structure, it shouldn't be cut down. What are these people thinking?

Saturday, September 11, 2010

Road Closed Ahead: Is Ballard's Re-Election Strategy of Massive Infrastructure Repairs Mistimed?

I am not convinced that the people around Indianapolis Mayor Greg Ballard actually care if the Mayor is elected. The Mayor's advisers seem clueless when it comes to understanding basic political strategy. The only strategy I can detect for re-election is this: Get a whole bunch of money and spend it on infrastructure repairs before the election. That way voters see how things have improved in the city, and Mayor Ballard coasts to re-election. The bills for the infrastructure spending comes years later, after Ballard is safely out of office.

Assuming the strategy of massive infrastructure improvements before an election would work...and I'm not aware of a mayoral election in which it has...isn't there something we're missing?

Look at the calendar. It is the middle of September, less than 14 months from the 2011 municipal elections. Paving and repairing roads and sidewalks shut down in the late fall until spring. You can't pour concrete and blacktop when you're faced with the uncertainty of freezing temperatures. If you knock out 4 months for cold weather, which is a conservative estimate, that leaves only 10 months to complete a massive number of projects.

People do like infrastructure improvements, but they do not like the road closures, detours and those orange barrels that are needed so those improvements can be completed. People complain about road construction all the time. It's not until the projects are completed that people are happy.

Come next spring and summer there are likely to be numerous closed roads, detours and orange barrels due to the Mayor's massive infrastructure repair programs. These repairs will take months, if not years, to complete leaving many parts of the city under construction. During the time, you're going to have traffic tie-ups, inconvenient detours, etc. that put people on edge. Rather than a public thrilled about the projects, you're likely going to see people frustrated and angry about all the construction...and they're going to blame the Mayor.

Maybe I'm wrong, but I don't see any way possible that these construction projects are going to be completed by Election Day, i.e. November 8, 2011. That leaves the Mayor having to go to post bragging not about a "rebuilt" Indy, but having to answer for a city that is "under construction."

Urban Expert Arron Renn Discusses Indy Parking Deal on Amos Brown

Amos Brown of WTLC interviewed urban expert Aaron Renn on his program last Thursday. You can get the audio feed here. It is definitely worth listening to.

Also, please check out Aaron Renn's comparison of the Chicago and Indianapolis contracts on his blog, Urbanophile.

It was good to hear that Amos Brown hasn't been taken in by that minority hiring angle ACS has been peddling in an effort to convince African-American councilors to support the deal. Even if ACS promised and delivered on 100% minority hiring, the fact is it's still a horrible deal for everyone in the community, not only for whites but also minorities.

Renn's side by side comparison of the Chicago and Indianapolis deals, illustrating that the Indy deal is even worse than Chicago's disastrous parking contract, may have been THE straw that broke the back of this deal. Monday's Rules Committee which was supposed to result in a vote on the contract has been cancelled.

One local politician expressed surprise that the parking proposal is being sponsored by Republican at-large councilor Barb Malone. It did seem to be an odd choice as Malone is someone who has occasionally expressed some independence from the Republican Caucus...not much mind you, but still more than almost all the other Republican councilors who rubber stamp, without question, everything this administration proposes.

It suddenly dawned on me the strategy. First, by having her carry the parking ordinance through the council, administration officials knew Malone would be in a position of having to advocate for the proposal rather than be a more neutral observer to the debate, someone who might eventually be persuaded to vote against it. Second, and more importantly, Malone is African-American. The administration s desperately trying to line up African-American Democrats on the Council to support the ordinance, chiefly by making promises about minority hiring. The old guard Republicans running this administration believe that if African-American Democrats see another black councilor sponsoring this measure, they will also support the deal.

Sure that's a simplistic approach to the politics of race that does not reflect how political issues play out in the black community. I've been around the local GOP for some time though and I know that is exactly how Old Guard Republicans think when it comes to races and politics. It's the same mentality that says if we Republicans just recruit an African-American to run in the 7th Congressional District in Indianapolis, black voters will see the GOP candidate's skin color and vote for him/her, especially if the Democrats run a white candidate. (Think of Rep. Andy Jacobs.) That strategy has never worked, yet Old Guard Republicans still peddle it.

Diana Vice of "Welcome to My Tea Party" Exposes Possible Ghost Employment by Sheridan Police Officers

Diana Vice of Welcome to My Tea Party last night filed an interesting story, outlining a situation where Sheridan police officers are getting two paychecks for supposedly for working two jobs at the same time:

There's a controversy brewing in the small Hamilton County community of Sheridan involving allegations of ghost employment; however, sources say they cannot go to the police with their complaints since the allegations are being made against the town's top law enforcement officer and his deputy chief.

According to insiders, Sheridan Police Chief Jeff Weir fired the town's School Resource Officer last March and took the job for himself. Sources say that after former SRO Brock Walker was fired from a position that he helped create and for which he obtained a federal grant to fund the position, Weir began carrying out those official duties during the hours for which he already worked as the town's police chief.

"He collected two paychecks for carrying out the duties for two jobs worked during the same time period," commented a source who says he has direct knowledge of the situation. "That sounds like ghost employment to me, which is a felony offense. Police officers should uphold the laws, not break them."

The Sheridan Community School Board Minutes dated March 8, 2010 appear to support the allegations that Walker was terminated, effective March 1, 2010, and that Weir was recommended for the position by the school board.

...

In addition, insiders also allege that Deputy Chief Bill Curl serves as the School Resource Officer for the elementary school during the same daytime hours for which he is also assigned duties related to his position at the police department.

"The issue of ghost employment was raised with the chief, but he insisted that what he was doing was perfectly legal," commented a source who asked to remain anonymous for fear of retribution.

"We'd like for the attorney general to investigate the matter and we have to ask for it anonymously for obvious reasons," commented one source in hopes that their message would reach the proper authorities via this blog.

Insiders are also upset that Walker was fired without just cause, and they would like to see to it that the officer's good name is restored through an independent investigation into the matter.

...

I have to agree with the source, and the fact that Chief Weir and his deputy are getting two paychecks doesn't pass the smell test either. If the actions of Weir and Curl are legal, then they shouldn't mind a little public scrutiny from the State Board of Accounts or the Attorney General. After all, an officer's reputation and future employment may depend upon it.

For the rest of the story, click here.

Actually, since federal funds are involved in the payment for the second job, the U.S. Attorney's office should be investigating. U.S. Attorney Timothy Morrison could pursue a civil action to recover the money as well as pursue violations of criminal law. Hamilton County Prosecutor Sonia Leerkamp could file state criminal charges for ghost employment and the Indiana Attorney General Greg Zoeller could file a civil action for the police officers taking money from local government coffers while employed in a federal position. I wouldn't hold my breath on any of these individuals taking action on matters involving possible ghost employment by public officials.

Friday, September 10, 2010

Nuvo's Considine Looks at Civil Forfeiture and the Common School Fund

The new news editor of Nuvo, Austin Considine, takes a look at civil forfeiture on his blog. Considine goes into a lot more detail regarding how the Common School Fund works. Here's the first part of the blog post:
Ever wonder where the money goes when a gambling ring gets busted? When a car is seized by police and auctioned?

Last weekend, The Indianapolis Star reported that as much as several million in cash from police seizures has not been making its way to the state Common School Fund, as is required by state law.

But I've been doing my own investigating on this story for several weeks now, and what I've found doesn't paint quite as clear a picture. There are reasons I didn't yet run a print story.

That's because millions of dollars each year are, in fact, making it from county courts to the Common School Fund, and some of it may be from seized assets.

What's unclear is how much of those millions come from civil forfeiture cases — in which seized property is forfeited to counties by way of civil court settlement. This is what The Star and some city advocates say is missing. The Star could be right (and is probably at least partly right), but unless it has examined the records at county clerk offices in all 92 counties, there's no way to know for sure.

Having read the article, there's no indication the research went that deep. Research like that would take months, if not longer.
...
Indeed, it is unclear where much of that money from civil forfeitures is going. I confirmed with treasury officials last month that only about
$100,000 in civil seizure revenue has come directly from all 92 counties to the treasurer for the Common School Fund over the last three years — most of it from Wayne and Putnam Counties.

As The Star points out, there's a lot of wiggle room in the state code language — and every reason to believe county law enforcement is interpreting the term "law enforcement costs" as broadly as possible. Even in Wayne County, County Prosecutor Michael Shipman explained to me that "law enforcement costs" included, at the very least, compensation for hours spent busting and prosecuting crimes, at hourly rates consummate with police and prosecutor wages.

[There's a convincing argument to be made that hourly compensation goes above and beyond "costs," since police and prosecutor pay is already budgeted. A cop or prosecutor gets paid from taxpayer revenues regardless of whether the hour spent making a bust turns up nothing, or turns up $100 grand.]

Steve Johnson, executive director of the Indiana Prosecuting Attorneys Council agreed there was a lot of room for interpretation. After Muncie prosecutor Mark McKinney was caught siphoning money from forfeiture settlements in 2008, IPAC took a look at how those settlements were handled around the state.

"After Muncie, we started looking around at how counties handled those funds," Johnson said. "And I was really surprised at the disparity in the way the funds are handled."

...

Little surprise, then, if police and prosecutors weren't forking over what they should for the Common School Fund. No one's really forcing them to.
Considine goes on to take a closer look at Indiana's Common School Fund and how payments into the fund are made. I would take issue with his overly harsh characterization of McKinney's handling of forfeiture cases as "siphoning" off money. I don't think McKinney was handling the cases much differently than other prosecutor offices.

For example, McKinney was criticized in an investigation by the Delaware County Circuit Court for entering into out-of-court settlements not scrutinized by the court. He was also criticized for playing a role in the prosecution and the civil forfeiture. Well, both of those things are going on in other counties in the state. In fact, I think there will be stories come out about civil forfeiture proceedings and misconduct by prosecutors, law enforcement types and others that are going to come to light and which will make McKinney's transgressions look like he knocked over a cup of coffee.

Regarding Considine's characterization regarding Wayne County Prosecutor Michael Shipman's comments regarding law enforcement costs, I don't think it's clear but I believe Shipman was saying that the law enforcement costs deducted from the forfeiture proceeds have to be related to the particular action that resulted in the forfeiture. Given the very commendable approach Shipman which involves an itemization of law enforcement costs which are usually very modest, I"m sure that's what he meant.

The rest of Considine's blog post is worth a read as he calls for an audit of where the civil forfeiture money is going and examines the mysterious Common School Fund in detail.

Thursday, September 9, 2010

Old Stadium Debt Lives On

Once again, Gary Welsh of Advance Indiana beat me to the punch reporting on a fine article in Tuesday's New York Times entitled "As Stadiums Vanish, Their Debt Lives On."

Here is part of the article:
It’s the gift that keeps on taking. The old Giants Stadium, demolished to make way for New Meadowlands Stadium, still carries about $110 million in debt, or nearly $13 for every New Jersey resident, even though it is now a parking lot.

The financial hole was dug over decades by politicians who passed along the cost of building and fixing the stadium, and it is getting deeper. With the razing of the old stadium and the Giantsand the Jets moving into their splashy new home next door, a big source of revenue to pay down the debt has shriveled.

New Jerseyans are hardly alone in paying for stadiums that no longer exist. Residents of Seattle’s King County owe more than $80 million for the Kingdome, which was razed in 2000. The story has been similar in Indianapolis and Philadelphia. In Houston, Kansas City, Mo., Memphis and Pittsburgh, residents are paying for stadiums and arenas that were abandoned by the teams they were built for.

But befitting its name, Giants Stadium is the granddaddy of phantom facilities. Taxpayers in New Jersey, already under pressure from declining local government revenues, this year will pay $35.8 million in principal and interest on the $266 million in remaining bonds for the Meadowlands Sports Complex, which opened in 1976 and includes the Izod Center and a horse racing track. Those bonds will not be paid until 2025.

For its first decade, the complex was a success. But its fortunes faded as horse racing declined, the Nets and the Devils left for Newark, and the Jets and the Giants built their own $1.6 billion stadium next door, which will host its first National Football League regular-season game Sunday.

To offset its declining revenue, the New Jersey Sports and Exposition Authority, which runs the sports complex but not the New Meadowlands Stadium, expanded instead of contracting: building aquariums, convention centers and other facilities, issuing hundreds of millions of dollars in additional bonds.

How municipalities acquire so much debt on buildings that have been torn down or are underused illustrates the excesses of publicly financed stadiums and the almost mystical sway professional sports teams have over politicians, voters and fans.

Rather than confront teams, they have often buckled when owners —usually threatening to move — have demanded that the public pay for new suites, parking or arenas and stadiums.

With state and local budgets stretched by the recession, politicians are only now starting to look askance at privately held teams trying to tap the public till.

“The Meadowlands wasn’t a bad idea, but rather than pay it off, they let it ride,” said Steven Malanga, a senior fellow at the Manhattan Institute, who has written about the perils of publicly financed stadiums. “Politicians essentially turned a good thing into a money loser for taxpayers at exactly the wrong time.”

Paying for arenas and stadiums that are now gone or empty is a result of a trend that stretches back decades. Until the 1960s, public works were often defined as bridges, roads, sewers and so on: basic infrastructure that was used by all and was unlikely to be built by the private sector. With few exceptions, like County Stadium in Milwaukee, teams constructed their own stadiums.

As pro sports expanded into cities from coast to coast, politicians and business leaders pushed for taxpayer-financed stadiums to lure teams. To name a few, New York built Shea Stadium for the expansion Mets, Atlanta put up Fulton County Stadium to lure the Braves from Milwaukee, and Oakland built a stadium to entice the Athletics to move from Kansas City, Mo.

Soon after, Philadelphia, Pittsburgh and Cincinnati built stadiums for teams already there. In some cases, cities justified the expense as a way to keep owners from moving their teams. In other cases, politicians argued that the stadiums would generate enough revenue to cover the construction cost.
The article goes on to mention Indianapolis RCA Dome debt that was rolled into the Lucas Oil Stadium debt.
The finances of public authorities are often murky. To determine that the RCA Dome in Indianapolis, which was demolished in 2008, has $61 million in debt remaining and will not be paid off until 2021, one must sift through 700 pages of bond documents.
Trust me...that was intentional. I know how Indianapolis insiders love to cover their screwing over of taxpayers in tons of paper and complicated legalese.

The article also could have brought up the debt on the Conseco Fieldhouse which, for reasons I don't understand, has actually gone up over the past ten years as reported by I believe Mary Milz.

Wednesday, September 8, 2010

ACS Used Disastrous Chicago Parking Contract As a Template for Indianapolis Parking Proposal

I strongly suspected ACS and not the City wrote the parking contract, especially when I saw the City accidentally left two references to "Xerox" in the middle of a the contract proposal which did not otherwise have any company names. It turns out it is true - and that the Indianapolis ACS contract was copied off the disastrous Chicago parking contract. (Not sure why Ice Miller is being paid nearly a half million dollars in legal fees when the Indianapolis ACS parking contract is merely a cut and paste of the one used in Chicago.) The Urbanophile does an excellent analysis of the two contracts. I would urge people to read the entire blog post, not just the findings I post below.

Here is the Urbanophile's findings:

1. This is the Chicago parking meter lease.The city has said this deal is very different from Chicago’s notorious parking meter lease. But what they didn’t tell you is that not only is this very much like Chicago’s, it’s literally the exact same contract. That’s right, Indy took the Chicago contract, did a Save As, and tweaked it. Check for yourself. Indy’s deal is here and Chicago’s is here. Given that Chicago’s deal is famously one-sided, this is mind-boggling. I estimate that the majority of the two contracts are word for word identical. This tidbit – “the foregoing sentence shall be interpreted and applied in a manner most favorable to the Concessionaire” – gives you a flavor of how the thing goes. And where Indy’s differs, it is often even worse. I never would have believed that possible.

2. The city has no right to terminate the agreement. The contract for this 50 year deal explicitly states: “The City hereby acknowledges and agrees that it may only terminate this Agreement in accordance with the express terms hereof and shall not, in any event, have the right to terminate this Agreement for convenience.” (Section 16.1). The city can only terminate the deal if the vendor defaults, which is virtually impossible. In a deal like Chicago’s meter lease or the Toll Road, where the only payment the government gets is a lump sum up front fee, perhaps there’s some logic in not allowing the deal to be terminated. But with a very modest $35 million up front fee (compared to a deal value of over $1 billion) and with a needed up front investment of only $7 million (according to the city), it’s unconscionable to not have the right to terminate. The citizens of Indianapolis with be irrevocably locked into a terrible deal for more than a generation – and for very little upfront cash.

3. Penalties are often higher than the actual meter value. One aspect of the Chicago deal that was heavily criticized is that when the city shuts down meters, it has to pay a penalty that assumes the meters were fully occupied at all times, regardless of how much they are normally occupied. Believe it or not, Indy even upped the game here. In two out of the four zones, the penalty for closing the meter is more than if the meter is 100% occupied. The closure fee is $15 for Zone 2 & 3, increasing with inflation. But fully increased rate for Zone 2 is $1 an hour for 13 hours a day – you do the math. It’s only $1 an hour for 11 hours a day in Zone 3. Those meters are literally worth more to the vendor bagged than they could ever be operational. These penalties have to be paid regardless of the actual average utilization of those meters. The penalty for the other two zones ($20) is just shy of the theoretical maximum, but still way too high. (See Definitions, “Temporary Closure Fee” and Schedule 5).

4. The vendor gets the rights to collect parking ticket revenue and sell advertising and naming rights. In the Chicago deal, the city gets all of the money for tickets, and retains all the rights and money for advertising and naming rights for itself. In the Indy deal, the vendor gets these rights, though the city has to approve the specifics of advertising. What is an advertising concession for thousands of locations downtown worth? It could easily be more than the meters themselves. This should have been bid to major outdoor advertising firms in an open process to maximize city revenue, not thrown into the parking meter deal, assuming festooning downtown with ads is something you want to do in the first place.

5. Residential permit parking is coming to Broad Ripple. The city says it plans to use the meter proceeds to build a new garage in Broad Ripple. Broad Ripple is Zone 4, and the contract says, “In the event the City builds a public parking garage in Zone 4 during the Term, the City will agree to institute a Residential Permit program for non-metered parking spaces in and around Zone 4 to be administered by the Concessionaire on terms mutually agreeable to the Parties.” Did you know that? The city is contractually obligating itself to specific permit parking policies in that neighborhood. Now perhaps permit parking’s not a terrible idea, but isn’t it something that should be vetted through the normal political process? And be subject to change over time, not locked in for 50 years?

Outside of Broad Ripple, the city has actually limited its ability to establish residential permit parking zones. Per the contract: “The City reserves the right to designate certain on-street parking that are not Metered Parking Spaces as residential parking requiring a Residential Permit, provided that such designation does not materially effect the Metered Parking System in the surrounding area.” How nice of the vendor to agree to this. If it does affect the vendor, they are entitled to compensation. Also, if the city does establish permit parking, the vendor gets to run that too – including getting the revenue from parking tickets.

6. The vendor even gets revenue from tickets written by IPD or other city agents. The vendor has the right to write tickets on the system, but the city also has the rights. And even if the city writes the tickets, the vendor still gets the money: “The Concessionaire shall have the exclusive right to collect and retain all Parking Violation Revenue during the Term in accordance with Enforcement Policies and Procedures, regardless of whether such Parking Violation Revenue resulted from Parking Enforcement conducted by the Enforcement Operator or the City’s designated law enforcement officers.”

The city retains the cost of adjudicating parking tickets, however. It does get to judge the validity of tickets, but disturbingly, the contract actually specifies the judicial outcomes it expects: “The City shall remain responsible for the adjudication related to the Parking Enforcement; provided that such adjudication shall be consistent with the historical practices of the City, including a consistent level of parking tickets that are dismissed or appealed.”

Incredibly, the city even owes money to the vendor if the public starts appealing tickets at a rate more than 30% more than currently, regardless of whether the appeals have merit or not (Section 7.8). It’s considered a “Compensation Event.”

Add this up and what it means is the vendor can write tickets, gets to have the revenue counted to it (minus the revenue share), and if the vendor just starts writing bogus tickets to inflate its own revenues, and the public protests them, the vendor gets even more money. That’s right, the vendor can literally print money for itself simply by writing as many tickets as it feels like.

Another hugely risky item. One other change from the Chicago deal is that the city is agreeing to indemnify the vendor against any court ruling that the vendor can’t write tickets or collect parking ticket revenue (Section 12.2). Someone is challenging the Chicago lease by saying that since the city transferred the meters by bill of sale (just like Indy), it’s a private business now and the city’s police powers can’t be used to enforce parking rules for the benefit of a private company. I believe this is still being litigated. I’m not sure what the law would be in Indiana, but if similar claims were raised and ended up being successful, the city could be on the hook for possibly hundreds of millions of dollars.

7. The vendor automatically gets the right to any new meters, but the city has to pay to remove any meters. In the Chicago deal, the city has to negotiate with the existing vendor for new meters outside the existing concession area, but is free to take its business elsewhere if the vendor won’t match what a competitor would offer. In Indy, any new meters are automatically enrolled in the new deal. (Section 7.7) I didn’t see where this was limited to the four specified zones, so it might in fact apply to any meter in the city.

However, if the city removes a meter, they have to pay a meter removal fee. In the first year, this is $15,400 per meter in Zone 1. I didn’t see any provision for offsetting adds and removes, meaning if the city adds three meters and removes one, the vendor gets the three new ones automatically and the city is still on the hook to pay for the one they removed. What’s more, the city is also on the hook for any lost parking ticket revenue the vendor would have gotten off that space too.

To show how one-sided this deal is, if the city adds more than 10% new meters, the vendor actually has the right to reject them. That doesn’t mean that the city can take its business elsewhere though. Rather, it puts them into a special category where the vendor runs them, but the city is responsible for the costs of setting them up (Section 7.7). That hardly sounds like what we’ve been told that all the risk is outsourced. By the way, Chicago has these types of meters too, but the vendor is only entitled to a 15% management fee for them, whereas in the Indy deal, they get a full revenue share.

8. Temporary closure policies are worse than Chicago’s. There’s a cost associated with closing meters for more than a very small temporary closure allowance. The Indianapolis closure allowance is worse than Chicago’s. In Chicago’s system, closures of six hours or more are treated as an entire day while those less than six hours are ignored. In Indy, anything greater than four hours is treated as a full day closure. In Chicago, Central Business District meters can be closed under the contract for up to 8% of the days without penalty. In Indy it is only 6% (see Definitions, “Temporary Closure Allowance”).

9. Will festival and events organizers see new fees? Section 7.6 says, “the Concessionaire shall charge, collect and retain the applicable Temporary Closure Fee from any Person (other than the City), in advance, in respect of any Temporary Closure requested by such Person.” What this sounds like to me is that if anyone other than the city wants to shut down meters, they’ve got to pay the vendor, and pay in advance. Does this mean anyone who wants to hold a festival or event downtown – even on a Saturday, since meters need to be fed then under the new contract – will have to pay this parking fee? And since the city has a revenue share, is this a stealth tax on those events? It’s not clear to me, but the contract explicitly says valet parking operators have to pay up.

10. Even the city has to pay to use the spots. As part of this program, all city issued parking placards are cancelled (Section 3.19). Now clearly this program has been abused in the past, but it seems legitimate that city vehicles on official business should be able to park on the city’s own streets for free. But I couldn’t find any provision of the deal that allows city owned vehicles to be parked in these spots for free even on city business, other than emergency response vehicles during an actual emergency. The contract does talk about an “employee parking program”, but the city or the employees will be paying for it. This is even more revenue for the vendor.

I could go on and on, but these are the highlights and should establish pretty clearly how bad this contract is for the city. It’s one of the worst I’ve ever seen. Even the Force Majeure clause is one way and only provides an out for the vendor, not the city