Libertarians Call Out Mayor Ballard on Epic Budget Cut Failure

You can't accuse the Marion County Libertarian Party of not living up to its principles, even if it puts them at odds with a mayor whose election they backed strongly.

In a release today accompanied by damning video of Greg Ballard uttering a campaign promise I knew would haunt him like "read my lips," the MCLP says it was surprised to hear Ballard is running for re-election because he said he wouldn't unless he could cut the City's budget by ten percent by the third year.



The MCLP says the Mayor fell way short. From MCLP Chair, Tim Maguire:

"I am very surprised that Ballard decided against honoring his campaign promise not to run again if he wasn’t able to cut the budget by 10%, especially since the budget cuts necessary would have been so easy to make. Even without the benefit of a full time team of lawyers and accountants, we were able to find at least $65 million that could have been cut off the top of the 2011 budget."

Libertarian City-County Councillor Ed Coleman added this gasoline to the fire:

When I ran as part of the 2007 GOP campaign team, it was because I and other small government advocates believed Greg Ballard's promise to reform government and reduce the spending. It was broken promises like this that prompted me to abandon the failed Republican Party and its bloated-government policies.

The 25th Floor of the City-County Building has undoubtedly assembled its team of lawyers to figure a palatable way for the Mayor to tell the public he met his promise to eradicate all the "fluff," but if you look at the Libertarian Party's analysis, you'll realize how quickly our Mayor will be resorting to a defense akin to "it depends on what the definition of 'is' is."

Libertarians Call Out Mayor Ballard on Epic Budget Cut Failure

Mayor Ballard Gives Pacers Eleven Million Per Year, They'll Save Twenty-Five?!?

I've written before on how my objection to the City bailing out the Indiana Pacers to the tune of eleven million per year for the next three years is informed by the fact the team's financial woes are caused by the NBA's terrible business model. I've also said NBA Commissioner David Stern is coming to the rescue.

Stern has said the NBA will pursue more aggressive revenue sharing to bring it in line with the NFL's extremely successful model. Any change to the existing revenue sharing model will put more money in the Pacers' hands as a "small market team."

But more importantly, Stern has consistently said the owners will try to lower the salary cap. He just hadn't floated a number until now.

According to Stern, the owners will ask for a thirty-three percent reduction in NBA players' salaries.

NBA owners pay their players roughly $2 billion, and the Pacers, with a payroll of $64,368,000 (19th highest of the 30 teams), account for 3.21 percent of that total.

So what would a thirty-three percent reduction ($800 million total) mean for the Pacers on a pro rata basis? An annual savings of $25,680,000 per year.

Many may rightfully contend that the players won't agree to a thirty-three percent reduction. Fair enough. But if the league gets only half of its requested savings ($400 million for a twenty-percent reduction), the Pacers still save $12,840,000 per year, or more than what the City is giving them.

Even if your goal was to keep the team at all costs, would you agree to give the Pacers taxpayer's money while knowing that a year from now they will be sitting on tens of millions more?

Here's your answer.

Not unless you were a mayor who (a) either has lousy business sense; or (b)made a pledge to GOP bigwig and Pacers CEO, Jim Morris, and/or to Bob Grand, a/k/a "the most influential man in the Ballard administration," a/k/a "the former President of the Capital Improvement Board, a/k/a "partner at Barnes and Thornburg, the Pacers' law firm."

One wonders exactly how many more times the Mayor can take an idea that is not bad in principle (see Citizens Gas sale, parking renovation) and craft lousy deals that benefit the politically influential to the detriment of average taxpayers.

Mayor Ballard Gives Pacers Eleven Million Per Year, They'll Save Twenty-Five?!?

Race Card Fever Is Catching!

Apparently, Democratic City-County Councillor Paul Bateman isn't the only one willing to join in the Mayor's race card game.

None other than T. Garrett Benjamin, the senior pastor of Light of the World Christian Church, is now personally lobbying members of the City-County Council to vote yes for a "once in a life time" opportunity "to put a minority firm on top and make them one of the largest in the country."

It boggles the mind that folks as astute as Reverend Benjamin cannot see that the City can do this on its own, keep tens (if not hundreds) of millions more than we will with this contract, AND STILL make Global the principal contractor, thereby giving it the experience and scope to compete nationally.

Minority business enterprises should absolutely be given "the opportunity to compete and prosper," as Reverend Benjamin contends. But our city doesn't need to sell its soul to ACS to give them that opportunity. Why do so many think it does?

Race Card Fever Is Catching!

Mayor Ballard Plays Race Card, Democrat Paul Bateman Picks It Up

This past Saturday I finally met Mayor Greg Ballard. I had just finished a segment on 1310 AM - The Light, during which I criticized the Mayor’s parking deal. He was waiting outside the studio, so I introduced myself and shook his hand. He glared at me like I’d walked on his lunch.

Never would I have imagined how badly he’d walk all over himself politically during the sixty minutes that followed, or that it would be a Democrat who would be coming to his rescue tonight.

The Mayor's radio appearance was calamitous. He used condescending phrases like, “Let me tell you something” while alternating between lecturing and being dismissive. When one man, obviously picking up on what the rest of the world was sensing, actually said that the Mayor sounded arrogant, the Mayor’s response was, “I have no idea what that is about.”

Oh, we know, Mr. Mayor.

But that’s no excuse for the racial demagoguery he is employing to sell the ACS fifty-year parking meter lease.

Being painfully objective, I am duty-bound to say that race in Marion County is ever-present in politics, especially in my party. Race gets harnessed frequently, and on occasion, abused. (See Al Sharpton, appearance on November 17).

But usually when people stoke a racial fire, they are trying to mold others’ perceptions or interpretations of events, and you can’t objectively say they’re right or wrong. Is Mayor Ballard indifferent to the bruises of Brandon Johnson or does he care deeply while being saddled with a tough Merit Board decision? A race-based appeal (pointing out that a white dude might not care all that much) might move people to the former view.

But what the Mayor is doing now isn't race-based persuasion; it's deceit in the form of omitting an unshakeable fact.

The Mayor asserted that his parking lease would make minority-business enterprise (MBE) Global Parking System, Inc., a national player and help it grow it’s 60% plus minority workforce. Repeating what he had said previously on Amos in the Afternoons, the Mayor quizzed with incredulity, “I don’t know how somebody could be against that!”

You get it, black folks? The Mayor is really looking out for you by specifically looking out for one company. If you are against this deal, you must be against Hal Darring, Global's CEO, which means you must be against black people.

But here’s the Mayor's obvious deceit through an even more obvious omission. If the City of Indianapolis was as psyched about Hal as the Mayor claims, it could pay for new meters itself (using bonds if necessary, as suggested by Bill Hudnut), make additional millions by cutting out ACS as the middle man, and still make Global its primary contractor.

Nobody could think the only way Hal gets more city work is by ACS fleecing the taxpayers on this deal, right?

Wrong.

Democratic (and African-American) City-County Councillor Paul Bateman, whose district cuts through most of Lawrence Township, is going to vote for the Mayor's deal for one reason: to help Global Parking and Hal Darring. Given that an awful lot of this administration's marquee deals were designed to reward particular businesses and/or individual's, who can criticize Bateman's motive?

But in supporting this deal, Bateman has bought into the disingenuous, racial crockery the Mayor is selling.

But wait! Say you're ACS and you want this deal badly. Maybe you sell it to Paul Bateman by letting him know that if ACS scores, it'll let Global come along when it rolls its pro-privatizatized monopoly, parking meter cabal into the next city. Maybe the real value for Global isn't gaining the experience or increased scale, but rather, the distinction of being ACS' go-to MBE subcontractor.

Fair enough. But if ACS is really interested in Global as a subcontractor, that interest shouldn't fall off just because ACS doesn't get an Indy deal, should it, Councillor Bateman? So who is really getting played?

In addition to tossing out the race card, the Mayor also implicitly admitted his administration's incompetence and political cowardice during his radio interview.

Ask the Mayor why the City can’t handle its own parking, and he’ll tell you parking “isn’t a core competency,” and he’ll tell you how meters stayed bagged too long, and the city loses revenue. First of all, as the Mayor admitted on air, we already have a private company doing the collections and ticket writing. That means there are two possible parties who are screwing up the bagging of meters: (1) the city; or (2) the contractor. If it’s “the city” that means YOU are admitting, Mr. Mayor, that you don’t know how to manage people. Make me manager for a day, and I'll tell every employee that any meter I find bagged for more than two hours more than necessary will result in the firing of the employee who was responsible for the meter. Problem solved.

Now, if the bagging problem is the the contractor’s fault, you are admitting, Mr. Mayor, that you don’t know how to manage a contract, so the idea we’d hand you a long-term one is pretty bananas, wouldn’t you say?

Friends, this is real simple. Over the next fifty years, meter users in Indianapolis will pay an estimated $1.0-$1.5 billion. If we take the Mayor's proposal, ACS will get between $400-$800 million of that money. If we don't take the Mayor's proposal, we'll get an additional $400-$800 million minus the costs of the equipment, upgrades, and management expenses.

Now, you'll all say, "Yeah, but it's ACS' management savvy that's getting that $1.5 billion. Not at all. This isn't ACS capturing greater market share with innovative product lines. The new money will come from increases from adding new meters, raising the rates, and technology that reduces "spillover," those situations where patron B uses the remaining time left on a meter from Patron A's change. Under this new contract, you won't be able to do that.

And therein lies the Mayor's political cowardice. One thing he also said on 1310 AM was that parking rates haven't gone up in twenty years. Notice the inactive verb? He doesn’t say “we” haven’t raised the meter rates while speaking about all the former mayors and himself. In Mayor Ballard's world, the meters are all Johnny Five's that can spring to life and adjust their own rates.

(Pssst! Mr. Mayor, raising the meter rate is your job).

At the end of the day, this is the REAL reason the Mayor wants to hand operations over to ACS. So that when rates go up, the Mayor can act like he had nothing to do with it, which is exactly what he'll be saying when our water and wastewater rates explode two years from now.

Mayor Ballard Plays Race Card, Democrat Paul Bateman Picks It Up

iPOPA on Pacers's Bailout

I was invited to appear on Fox 59's first "Faceoff" segment, during which two members of the community debate "issues of the day." The topic for myself and NUVO contributor (and talented writer) Andrew Roberts was whether the City should absorb the $15-$18 million cost of operating Conseco, thereby "bailing out" the Pacers. Here's my statement, which is a bit more detailed than what any 2-minute video can allow:

I don't want the Pacers to leave. But the City should not give an extra dime to millionaire ballplayers and billionaire owners when it's on pace to set a homicide record, can't pay for basic services like libraries and transportation, and has to use deficit spending, back-door tax hikes for sidewalks and roads.

The Pacers have not even shown us their books, so we have no idea how leanly they operate. All we know is they pay more in player salaries than one-third of the teams, and the NBA will almost certainly adopt NFL-style revenue sharing when it creates a new collective bargaining agreement at the end of 2011. How foolish will we look opening up the public coffers when bad management put the Pacers in the hole via low attendance and costs, and we can see the smoke from the money train pulling into the Pacers' station?

Most observers do not believe the Pacers could find a better deal in any other small-market city, they would have to pay between $50 and $150 million to move, and every objective study shows that when a team relocates, the psychological loss is real, but the economic one isn't. You can't even call this proposal a "bailout" because that connotes an opportunity to recover the dollars government provided. So far, all the Pacers have said publicly is that the taxpayers should eat a cost the Pacers agreed to cover. Sorry, but we're stuffed right now.

Here's the video segment:
 

iPOPA on Pacers's Bailout

iPOPA Schools You on "Expectations Game" and Greg Ballard's Thin Line Between Hero and Con Artist

People who follow politics know the most consistent foe for an elected official or candidate is the “expectations game.”

If expectations get set high, the best case scenario is an “as good as expected,” which means you can never actually “win.” If they get set low, you might hold your own with a seasoned opponent just by asking him, “Can I call ya, Joe?” winking, and uttering a complete sentence.

In other words, as paradoxical as this sounds, having people expect nothing from you is great. But here’s an iPOPA corollary. If done right, playing up a catastrophe that isn’t is just as valuable.

Think about it.

You go to a restaurant, and they say you can’t be seated for an hour. But the next thing you know, your little chimichanga-shaped beeper is lighting up 30 minutes later. Or your auto mechanic says, “This will cost $600,” but when the works gets done, it’s only $425. Awesome, right?

Now imagine the scenario where a 3rd party, the manager, steps in at the restaurant and says, “Your wait is an hour? That’s won’t do at all. (To hostess) I want these folks to be seated within 30 minutes!” Or the body shop chief says, “We’re going to cut this bill to $425!” You’d love those people, right? But what if you found out later that the restaurant knew the wait was really probably going to be around 15-20 minutes and the mechanic really had the cost pegged at $350? Wouldn’t you feel suckered?

***

So I’m with my little man at the Marion County main library about two months ago, and as we're walking out, I see somebody I know on the library board photo. Two days later, I see this person, and I mention I was just at the Glendale branch, and that I hoped they could avoid closing it because it was jam-packed. The person responds that (s)he looked at the books and so has another "well-informed individual" and there are cuts to be had to keep the libraries open. I ask for confirmation, and I got what I felt was a pretty resounding expression of confidence.

That was a staggering revelation to me because I’d read the horror stories just like you all about the impending doom. I started wondering about who has a vested interest in claiming impending tragedy that really isn’t? My first thought was that this was an effort to sway referendum voters on whether they really want permanent property tax caps (more on that coming to you later). But then the Mayor swoops in with a solution that isn’t really, and as Democratic mayoral candidate Melina Kennedy pointed out, the financial pinch won't hit until 2014, so it's not like we're going to turn Keystone Avenue in front of the Glendale branch into to a Half-Price Books.

***

So next I hear Indygo is about to be reduced to apparently one bus that just drives in circles from 10th and College to West and Washington. [Okay, it wasn't really that, but it sounded equally cataclysmic.] The next thing I know, the Mayor swoops in with "solutions" that aren't really. I kid you not, his ideas are: (1) tap a $5 million Indygo line of credit without knowing how it will be paid back; (2) shift $1.6 million that has been set aside for insurance to cover lawsuits; and (3) take $3 million from capital improvements (i.e., making the buses less rickety) and use it for operating costs. And for this, the Star gives Ballard the headline: "Ballard Says City Will Help Indygo Pay Expenses." Wow.

My first thought was that Indygo must really know its drivers to put aside that kind of cash for liability. But here's the Mayor, deciding they’ll use this cash to keep the company operational instead of waiting for lawsuits that might never happen. Brilliant! Thank God Ballard is on the 25th Floor because certainly nobody associated with Indygo could have ever come up with "borrow, raid the reserves, and spend our legal funds and pray we hit fewer pedestrians this year."

My point is this … even though I know the economy is bad and dollars are probably tight in most places, after the Mayor's CIB inflated its deficit figures, because of most likely inflated Pacer operating losses, and because of the episodes above, I now find myself suspicious of the books of any entity that the Mayor controls directly or by appointment power or for whom he shills. They keep, curiously, putting him in a position to "save the day" only for us to later learn the day didn't really need saving to the degree claimed or that the saving was just for a day, not a long-term solution.

Conspiratorial? Alright, I admit it. But explain this. Mayor Ballard said he would go into the city and cut 10% of its budget. He hasn't come close. He smashed Bart Peterson for passing an increase in the County Option Income Tax (COIT). But notice he kept the money. Insiders will tell that if Peterson wouldn't have done the COIT, the Indiana General Assembly (cough - Luke Kenley) wouldn't have authorized a state takeover of police and fire pensions, which unloaded a huge burden on the city's finances. In addition, you have a massive federal influx of dollars, which I would wager means that if you add all revenue streams, Greg Ballard has more dollars at his disposal than any Mayor in Indianapolis history. (I'm going to get these numbers!)

So why is the Mayor raising taxes on almost every service provider in the county, and why do we need an imprudent, back-door tax increase in the form of a $170 million bond issue just to fund sidewalk repair? (I still don't know anybody who can say specifically how the separate $262 million from the back-door-tax-hike Cit Gas purchase of the water and wastewater operations will be spent).

Sorry, but, yet again, something doesn't add up here.

In the Ballard Superman story, maybe truth is the kryptonite, which is exactly why the administration, quite frequently, seems to have it tucked away in a lead box.

iPOPA Schools You on "Expectations Game" and Greg Ballard's Thin Line Between Hero and Con Artist

UPDATED: Ballard Jr.'s Employer Cashing In On Both Ends?

We learned today that Mayor Greg Ballard hired American Structurepoint as project manager for "ReBuildIndy," the name Hizzoner has given the road, sidewalk, and curb improvement effort to be allegedly undertaken with the dollars from a 30-year, $170 million bond issued against expected increases in payments in lieu of taxes (PILOT), and the $262 million in proceeds (paid for by us all through foregoing a decrease in our rates) from the transfer of Citizens Gas. Do me a favor and read the release for what it says. Then I'll tell you what it doesn't.

First, as chronicled by both Ogden on Politics and Advance Indiana, at least one of the company's executives, Willis Conner, was indicted for bribery when the company operated as American Consulting Engineers years ago. (As a quick aside, don't you love how the corporate form allows you to hide from your misdeeds?) Paul Ogden reports that just two executives - Conner and Marlin Knowles, Jr. - donated a combined $55,000 personally to the Mayor. No, you did not misread that figure. And we don't even know how how many other dollars Ballard got from American Structurepoint personnel.

But that's not why I'm here. And, no, it's not because the Mayor is stealing Governor Daniel's playbook by mortgaging our future revenue at a discount for infrastructure improvements that he'll adorn with a catchy title for a political boost ("Major Moves," anyone?), or that it's pretty arrogant to hire a company to manage a project that hasn't even been approved by the City-County Council or the IURC.

And, no, I'm not here to comment on this paragraph from the Mayor's press release:

If the transfer of the water and wastewater utilities to Citizens Energy Group is approved, the city will invest more than $425 million into this program. This is in addition to $88 million already committed for transportation upgrades.

I'm not here to ask why the Mayor continues to act like this thing is one project when the $170 million bond issue is completely separate, or where this $88 million came from and why, if it's been committed, the money hasn't been spent. If the roads are crumbling and $88 million was just sitting there for upgrades, why wouldn't you, ya know, be building something already?

No, I'm here to talk about this seemingly innocuous part of the release:

After a competitive qualification submittal and review process, DPW selected American Structurepoint’s team of local firms with expertise in engineering, project management, and public outreach for its experience related to Indianapolis infrastructure.

So it's not just an individual bid? It's more like a "team" bid by American Structurepoint and other firms with whom it works?

A synonym for public outreach is "public relations." Wouldn't it be wild if the firm Structurepoint uses for "public outreach" is Hirons and Company, the very firm that employs Greg Ballard's son and is handling the PR for the Cit Gas sale?

Guess who has a reliable source that says it is? (I just texted Molly Deuberry, the Mayor's communications director for confirmation and her explanation of the bidding process. I'll update when I hear back from her).

If this is true, wouldn't that mean that the company for which the Mayor's son works is receiving your tax dollars to lobby for passage of a project that will result in them getting more of your tax dollars to describe that same project? Talk about getting dollars coming and going! Talk about your tax dollars going to promote Greg Ballard's re-election (just like I said, by the way).

As I aluded to above, one thing that is not clear from the press release is how the contract was bid, as it reads like the best "team" was selected. Specifically, I wonder whether American will pay the "team" members out of its overall contract? If so, can you imagine how in demand Hirons will be for similar "team" projects?

Having Hirons would be like having Paul Page as your lawyer on a criminal defense matter in Marion County. You know you'll get a special look.

UPDATED: A colleague who is pretty familiar with government procurement states that any "competitive" process would have treated project management as "professional services" which are never determined by bid price. In other words, the discretion to pick whoever responds to the Mayor's RFP (Request for Proposal) is as broad as his ability to weather the public criticism for whom he picks. Fifty-five thousand dollars ($55,000) would sure make me thick-skinned? Also at Structurepoint? Greg Henneke, Steve Goldsmith's Director of Public Works.

[I am still waiting to hear from Communications Director Deuberry. I was going to praise the fact she replied to my text messages at 10:00 p.m. last night. That's admirable accessibility and a strong work ethic. But then I never heard back today, so I have to yank the kudos. Sorry!].

UPDATED: Ballard Jr.'s Employer Cashing In On Both Ends?

Ballard Jr.'s Employer Cashing In On Both Ends?

We learned today that Mayor Greg Ballard hired American Structurepoint as project manager for "ReBuildIndy," the name Hizzoner has given the road, sidewalk, and curb improvement effort to be allegedly undertaken with the dollars from a 30-year, $170 million bond issued against expected increases in payments in lieu of taxes (PILOT), and the $262 million in proceeds (paid for by us all through foregoing a decrease in our rates) from the transfer of Citizens Gas. Do me a favor and read the release for what it says. Then I'll tell you what it doesn't.

First, as chronicled by both Ogden on Politics and Advance Indiana, at least one of the company's executives, Willis Conner, was indicted for bribery when the company operated as American Consulting Engineers years ago. (As a quick aside, don't you love how the corporate form allows you to hide from your misdeeds?) Paul Ogden reports that just two executives - Conner and Marlin Knowles, Jr. - donated a combined $55,000 personally to the Mayor. No, you did not misread that figure. And we don't even know how how many other dollars Ballard got from American Structurepoint personnel.

But that's not why I'm here. And, no, it's not because the Mayor is stealing Governor Daniel's playbook by mortgaging our future revenue at a discount for infrastructure improvements that he'll adorn with a catchy title for a political boost ("Major Moves," anyone?), or that it's pretty arrogant to hire a company to manage a project that hasn't even been approved by the City-County Council or the IURC.

And, no, I'm not here to comment on this paragraph from the Mayor's press release:

If the transfer of the water and wastewater utilities to Citizens Energy Group is approved, the city will invest more than $425 million into this program. This is in addition to $88 million already already committed for transporation upgrades.

I'm not here to ask why the Mayor continues to act like this thing is one project when the $170 million bond issue is completely separate, or where this $88 million came from and why, if it's been committed, the money hasn't been spent. If the roads are crumbling and $88 million was just sitting there for upgrades, why wouldn't you, ya know, be building something already?

No, I'm here to talk about this seemingly innocuous part of the release:

After a competitive qualification submittal and review process, DPW selected American Structurepoint’s team of local firms with expertise in engineering, project management, and public outreach for its experience related to Indianapolis infrastructure.

So it's not just an individual bid? It's more like a "team" bid by American Structurepoint and other firms with whom it works?

A synonym for public outreach is "public relations." Wouldn't it be wild if the firm Structurepoint uses for "public outreach" is Hirons and Company, the very firm that employs Greg Ballard's son and is handling the PR for the Cit Gas sale?

Guess who has a reliable source that says it is? (I just texted Molly Deuberry, the Mayor's communications director for confirmation and her explanation of the bidding process. I'll update when I hear back from her).

If this is true, wouldn't that mean that the company for which the Mayor's son works is receiving your tax dollars to lobby for passage of a project that will result in them getting more of your tax dollars to describe that same project? Talk about getting dollars coming and going! Talk about your tax dollars going to promote Greg Ballard's re-election (just like I said, by the way).

As I aluded to above, one thing that is not clear from the press release is how the contract was bid, as it reads like the best "team" was selected. Specifically, I wonder whether American will pay the "team" members out of its overall contract? If so, can you imagine how in demand Hirons will be for similar "team" projects?

Having Hirons would be like having Paul Page as your lawyer on a criminal defense matter in Marion County. You know you'll get a special look.

Ballard Jr.'s Employer Cashing In On Both Ends?

AMENDED: Ballard Hooks Up Son; Unveils New Logo for "Public Works"

Greg Ballard, Jr. is a copyeditor at Hirons and Company, a public relations firm, or so says his "Linked In" page.

Mayor Ballard gave Hirons and Company a non-bid contract worth $10,000 per month with to push the Mayor's transfer of our water and wastewater systems to Citizens Energy Group.

When was Ballard, Jr. hired? August of 2009. When did the City get its responses to the Request for Expression of Interest that started this process? August of 2009. In other word, young Ballard went on the Hirons payroll the same month the City's massive PR campaign started churning.

Is anybody bothered by this?

Or how about this? I've told everybody who will listen that the Mayor's $140 million backdoor tax increase bond issue and separate backdoor tax Citizens Gas transfer will both be used as the Mayor's springboard for re-election. In response, many have said, "Oh, they won't have time to get things built." They'll get $170 million at closing but the other $90 million won't be provided until October of 2010, a month before the election.

My learned critique is as follows: "Bovine feces."

The Mayor doesn't need to build everything (though a good many projects will be cranking the second the dollars are received). All the Mayor needs to do is let people know building is coming and he's responsible for it.

I've said repeatedly that all the Mayor would need is a nifty logo to advertise the repair work coming. Something like....oh, I don't know...how about "Rebuild Indy?"

Take a look at how the Mayor is already spending your tax dollars to advertise his re-election campaign, folks. The Mayor will also claim that these two deals are going to create 10,000 jobs.

That number is ludicrous, but we know at least one job has been secured already by the Mayor's efforts - the one held by his son at Hirons and Company.

UPDATE: We know the $140 million bond issue is for roads and sidewalks, but hasn't the Mayor consistently said that's what the $262 million is for as well? Why does the city have a list of abandoned homes on its Cit Gas deal website now?

Here's why. Because even though the Mayor told us all he'd chop 10% off the City's budget, he hasn't been able to do it. And even though he said he would address abandoned homes, he hasn't been able to do it with general fund revenues.

In short, the Mayor needs to fulfill his campaign promises, but he doesn't have the money to do it. And understand this. We could transfer Cit Gas without forcing them to pay us anything. If we did that, we'd all save money on our rates. But because Cit Gas has no cash reserves, if they pay us, we'll pay, too.

So, here's the short of it. Do you want your sewer rates to go up so Greg Ballard can knock down abandoned homes? It's that simple. You could support the bond issue and get $140 million in sidewalk and road construction and pay for that, too, as a rate increase, but don't think you're ever going to see the entire $425 million going into just roads, sidewalks, and bridges, because it won't happen.

AMENDED: Ballard Hooks Up Son; Unveils New Logo for "Public Works"

Governor Daniels Complicit in Shady Brizzi Real Estate Deal Or Just Hiding Egg on Face?

Dirty.

I don't care whether it's "technically" legal if it is, which is a huge if. But the Indianapolis Business Journal's Cory Schouten all but proves what I've believed all along.

Let's put together the pieces.

Paul Page says that Carl Brizzi brought an Elkhart property to his attention, so they bought it.

Really, Paul? I hadn't heard you dabbled in commercial. I thought you were a residential guy. But, hey, diversification is good. Just one question. What made you think this was a good deal?

Really, Carl? That's how you spend your free time? Trolling Elkhart, Indiana for hot commercial properties?

Did I mention that only a few months after Brizzi and Page bought the building, its value shot up $500,000 (from $700,000 to $1.2 million ) based on a 10-year lease with the Indiana Department of Child Services at a rate that, if all proceeds were applied to the mortgages, would have had the owners owning free and clear a building in about five years.

I bet if somebody knew that the Indiana Department of Child Services was looking for 13,000 square feet in Elkhart (in other words, a property exactly like the one Brizzi bought), that would be very valuable intelligence, wouldn't it?

But you'd have to know somebody with that kind of information, and I'm sure Brizzi didn't.....what's that? John Bales? You mean Brizzi's business partner? Wait. Isn't he the same guy who represents the state in about every county brokering deals for state agency office space?

But wait! We get confirmation from Page himself.

From Schouten:

[Page] said Brizzi earned his stake in the Elkhart building by bringing him an attractive investment opportunity. He said Brizzi and Bales, a Brizzi partner on previous deals, approached him about the Elkhart building.

It gets worse.

Schouten provides these details on the Elkhart deal. Read closely. You need to hear it all - the good, the bad, and the ugly about this property.

1. The property has two mortgages: A $1.2 million first mortgage with Huntington Bank and a second mortgage for an unspecified amount with a company called BAB Equity LLC, which lists a post office box real estate broker John Bales has used for his companies and political contributions.

2. A spokesman for the Indiana Department of Administration said the second mortgage does not appear to violate Bales’ state leasing contract, which bans him from any direct or indirect ownership interest in properties the state leases.

3. Bales said in an e-mail that he does not control BAB Equity but refused to say who does. He did not respond to follow-up questions including why the company uses his post office box.

4. Bales and his firm, Venture Cos., orchestrated the $2.5 million, 10-year deal that put the state’s Department of Child Services into the building a few months after L & BAB LLC acquired the one-story building at 1659 Mishawaka St. in February 2008.

Interesting. Does DCS know who runs BAB Equity? If not, how can its legal counsel offer any comment on whether Bales has an ownership interest? BAB. What could that possibly stand for? Brizzi AND....hmmm. I need a "B" name.

I wouldn't tell who owns it either if I were Bales because I'd know the follow-up question would be, "Who financed the 2nd mortgage?" As a perhaps related question, does anybody think it's weird the second mortgage wasn't recorded until the day before the FBI raided Tim Durham's office?

Some other choice tidbits:

- Venture (Bales' company) arranged to list the building for sale with an asking price of $1.8 million in late 2008, immediately after the DCS executed its lease deal. The property did not sell.

- The Elkhart building had a market value of about $700,000 before the state lease and $1.2 million after the lease, according to an April 2008 appraisal prepared for Huntington Bank. The appraisal says the building would be difficult to market to traditional office users because it is surrounded by industrial properties and has no street frontage.

- The 1986 building had been vacant for several months and badly in need of repairs when L & BAB put the property under contract. The appraisal noted the 15,200-square-foot building had interior mold, three broken AC units and deferred maintenance on windows, exterior bricks and parking-lot pavement.

- L & BAB had planned to spend $422,500 to renovate the building and prepare most of it, about 13,000 square feet, for the arrival of DCS. The company eventually paid $825,000 for the property, and got a $15,000 allowance from the seller to remedy an animal infestation.

- Financial documents included in the offering show the building owner, building seller, DCS and an insurance company split more than $577,000 of expenses to renovate and outfit the building. The owner’s portion was about $315,000, while DCS paid about $200,000 for upgrades including new restrooms.

The records show Page invested $321,835 in the building and financed $993,750. That includes a commission of $88,400, and a development fee of $45,600, both going to Venture (Bales' company).

- Records suggest Brizzi was added as a co-owner of the building late in the process. Financial documents provided to potential buyers in 2008 list Bruce Zeller of Carmel-based Zeller Construction Co. as co-investing with Page. Zeller did not return a phone message.

What does this all mean? Carl Brizzi got "inside" information from a guy who works for Governor Daniels. Because the Governor hates government owning things, we got fleeced. The State could have bought that building and saved a bundle. Instead, the guy Daneils entrusted to find it deals (and the one who advised and negotiates rates, right?), handed valuable intelligence to a business partner crony, and on top of that, the State even paid $200,000 to make the building better. Wow.

I asked a colleague of mine who is in commercial real estate how he thought this might have gone down, and here's his hypothesis:

(Bales) knows he has a 15,000 SF requirement in Elkhart. He identifies several possibilities, one of which is the building in question ("Building A"). He tips off Brizzi and Page. Brizzi and Page put the building under contract (or get an option with the owner) for 60 day "due diligence period" w/no penalty for not moving forward with deal - it's called a "free look" in the industry. This contract allows Brizzi/Page to purchase Building A at a fair market price (or a bit higher to sweeten the deal for the owner), but for a vacant property. So relatively cheap.

Bales decides w/state signoff that Building A is the best location for the state. Brizzi/Page exercise their option or otherwise move forward on their contract and close on the property. The contract might even have a clause that makes closing contingent on landing a deal. Regardless, state lease on Building A signed at closing or shortly thereafter. This has immediate impact on value of Building A, taking it from a vacant property to a fully leased (10-years), $17 per square foot (e.g., rich) property. Building A also becomes (theoretically) immediately marketable for its income stream to an investor, so it should be easy to flip.

Payoff for Brizzi/Page - at least $500k-$1million each, for almost no risk. Bales without doubt gets something something (like 50%) under the table from Brizzi/Page (without technically violating the self-dealing clause in his state contract).

Not bad for a days work. This scenario is comparable to Gordon Gekko, trading on inside information that the market does not possess. If Building A were a stock/security, there would be a good case for securities violations under federal law... Bales surely violated his ethical duties as a licensed broker, but I'm sure there is no paper trail! So good luck proving it.

All we know for certain is that Bales got $120,000 in commissions. What we don't know is if there were any other buildings in play. What if there weren't? At some point, isn't there a conflict when a broker helps a third party become an owner to consummate a deal that's already on the table? What we also know is that Bales has previously pitched crappy space to government decision makers. Remember when Bales tried to move the Metro Drug Task Force to a rat-den?

You know what I want to see now? Every contract with John Bales' name associated with it. How many friends has he enriched or gotten better deals than the market would have born, but for his intercession and trading on information only available to him? How much did he cost the taxpayers with Governor Daniels' blessing?

Were I the Governor or the Mayor of Indianapolis, I'd end any and all Bales' contracts right now pending a formal investigation.

Will you, Governor? Will you Mr. Mayor?

(Crickets chirp. Tumbleweeds roll through).

Governor Daniels Complicit in Shady Brizzi Real Estate Deal Or Just Hiding Egg on Face?

CIB Needs to Let NBA Commissioner David Stern Solve Pacers' Problem

It strikes me as supremely ironic that Mayor Ballard, a Republican, wants to bail out the Indiana Pacers by assuming the $15 million annual operational cost for Conseco Fieldhouse. (Doesn’t anybody remember that the Pacers demanded the right to run Conseco because they wanted to get all the non-game event revenues? But we’ll put aside the whole “living up the terms you negotiated” thing for just a second).

In December of 2009, Forbes released a report that taught us forty percent of the NBA’s franchises (12 of 30 teams), including the Pacers, lost money in the 2008-2009 season. Another league source predicted 25 teams would lose money in the 2009-2010 season.

Can I ask a silly question? If "companies" that lose money are unsustainable, and forty percent of the NBA’s “companies” are in the red, is there any way to contend the NBA business model is not completely broken?

Of course not.

This is why Commissioner David Stern has said two things need to happen:

(1) Players need to be paid less (look at these salaries); and

(2) The league needs to adopt a revenue-sharing scheme closer to what the NFL employs so that small market teams can stay competitive and profitable.

While the first proposal is obviously controversial with the players union, the second one isn’t.

From NBA Fanhouse:

At least the union and the owners agree revenue sharing is needed to help small-market teams. Hunter was receptive when speaking about revenue sharing Friday, and Stern said it will be part of the next CBA, although it won't be negotiated until after a document is in place.

(As a quick aside, is anybody else amazed some Republican somewhere hasn't tried to grandstand on pro sports' revenue sharing models by claiming they're socialist?)

But I digress. Think about this. Mayor Ballard’s wants his CIB to bail out the Pacers even though they haven’t appreciably cut back their payroll while allegedly losing money every year they've been here and while some type of revenue sharing proposal is almost a certainty in the next collective bargaining agreement?

When Mayor Ballard bails out the Pacers, will it be just for this year? No, because it legally can't be. So if a revenue-sharing agreement is subsequently passed in late 2010, will the Pacers pay us back (with interest) for covering them for this year and into the future, just like the banks who got money from the federal government or will it just be a giveaway?

While I’m on the CIB issue, the Mayor has repeatedly stated that no dollars from the Cit Gas transfer will be used to pay the Conseco operating costs and no dollars from his administration will go to the Pacers. His comment is completely disingenuous, but I can’t technically say it’s a lie because money is a fungible good.

Say I have mentally earmarked $15 million for abandoned homes because I said I would do something about them during my campaign, but I still haven’t. When Cit Gas money comes in, I mentally unmark the abandon homes dollars and move them into the CIB. Then I take $15 million from the Cit Gas deal and tell everybody, “Look at me! I’m using Cit Gas money for abandoned homes!” In other words, unless CIB comes up with $15 million more in cuts, Ballard HAS bailed out the Pacers the minute we agree to pay for Conseco. The Mayor can't spin out of that reality.

I say "bailed out" because the company has a legal obligation to make the payments, says it can't, and we let them off the hook. According to the Hunden Strategic Partners report prepared for the CIB to provide political cover for Ballard's upcoming bail out, we should go along because the Pacers generate $55 million for the local economy per year. But as GOP blogger Paul Ogden writes, this report does not address the $150 million penalty the Pacers would have to pay to move the team.

I do not want people to misunderstand me. The Simon family have done some great things for this city, and the Pacers have brought me some of my greatest personal memories. But, in fairness, the Simons have always used the Pacers as a loss leader. When I hear Jim Morris say how many years they've lost money, it doesn't make me sympathetic. It makes me say, "Then it was really stupid of them to assume responsbility for Conseco knowing they were already losing money, wasn't it?" They gambled, and they lost.

Can anybody envision a professional sports team telling its host city, "Hey, we see you're struggling, so we're going to go ahead and pay more taxes?" The Colts sure didn't. Remember when GOP State Senator Luke Kenley floated a plan that would have the Colts giving the CIB just $5 million. Jim Irsay crushed that idea in a heartbeat because it wasn't "part of the deal." We can't get $5 million from a team riding high when we're in trouble, and yet, when this city is struggling, we'll pick up a $15 million tab?

Yes, I love the Pacers, but when libraries are allegedly closing (more on that later), our murder rate is on record pace, and Indianapolis has suffered disproportionate job losses, you can't let nostalgia make you soft in negotiations.

iPOPA, you say, if the Pacers go, we'll lose jobs. None of those popcorn sellers will be making their $10/hour for two hours per game. But that's if the Pacers go. And no matter what Jim Morris says, they won't. They won't pay $150 million in penalties when they can wait until the new revenue model is put in place later this year.

Make no mistake about it, if Mayor Ballard doesn't bail out the Pacers, they'll be living at David Stern's door to ensure the business model gets fixed.

In short, the best approach is to make sure the Pacers management team is highly motivated to change, not how the City of Indianapolis treats them, but how the NBA does.

CIB Needs to Let NBA Commissioner David Stern Solve Pacers' Problem

The Mayor's Magic Water Deal

(Enter CARNIE BARKER onto pier, speaking with a bullhorn):

“…gather around, friends, and witness the amazing legerdemain (a/k/a “sleight of hand”) of the Great Ballardo, a political magician who pulls money from an empty hat.”

Of course, magic isn’t real, but I fear we’ll soon all be the suckers born every minute of whom P.T. Barnum spoke if Mayor Greg Ballard achieves his two-step skullduggery with the city's water transfer and road repair bond issue.

To proponents of these deals, I ask, "Can't you see our future is the hat, and these deasl are what makes it empty? Or do you just not care because you'll profit from it? (But more on that later).

For months, Indianapolis’ illusionist-in-chief has touted the sale of the city water and wastewater facilities to Citizens Gas as a one-stop, $425 million bonanza of smaller rate increases (a/k/a "backdoor tax increases"), roads, bridges, and sidewalks. That’s a complete distortion, but fortunately, now that the Indianapolis Star’s Francesca Jarosz has seen the Mayor's misdirection, she won't let him dart out of the spotlight of public scrutiny.

Here’s the real deal, folks. City-County Councillor Mike Speedy has introduced two resolutions. The first is for the transfer of the water and wastewater facilities to Citizens Gas, a deal plagued with problems but not the subject of this post. The second is for the issuance the aforementioned bonds, a notion crammed into the City’s Memorandum of Understanding (MOU) though it has absolutely no connection to the Cit Gas deal.

Why do I say there is no connection? Because Mayor Ballard’s chief-of-staff, Chris Cotterill, said so.

From the Star:

[Cotterill] said the city can collect the $140 million whether or not the Citizens sale is approved. That money comes from annual payments made from the sewer utility in place of taxes, and because the sewer system is appreciating in value, the city is increasing the annual payments and capturing them upfront.

Why would Ballard combine the two? PR. He wants the bigger number.

But let me dissect something for you because this is critical.

“capturing them upfront….”

That phrase – “capturing them upfront” – makes me chuckle. It sounds like the Mayor took a butterfly net and, through his NatGeo-acquired tracking skills, snagged the rare specious, Taxpayerus Chumpus.

Every time you hear “captured them upfront,” your mind should automatically think, “unleashed your financial future into the wild to be devoured."

You see, there is a schedule of payments in lieu of taxes (PILOT) to be made to the City of Indianapolis through 2039 by either the current management of the water/wastewater system or Citizens Gas (Exhibit E of the Memorandum of Understanding), and folks, it's clearly more than $140 million, even over a ten-year span. I can only assume, therefore, that this graph of what WILL be paid already includes the additional amount expected from capital spending. But there's absolutely no explanation on that point. Did the Mayor just pull this $140 million out of a hat, too?

Here is something else fascinating I just saw in the MOU that I missed before:

The City has projected that given the significant capital spending associated with the Wastewater system, the annual payment in lieu of taxes will increase in accordance with law. Accordingly, the City intends to issue debt secured by the PILOT ("PILOT Bonds")prior to the time a definitive agreement may be reached by the parties.

Isn't that the strangest (and most arrogant) thing? The MOU actually foretells the timetable for issuing the bonds vis-a-vis the water company transfer. Were I a city-county councillor, that might rub me the wrong way.

But getting back to the philosophical issue, instead of living within the City’s means and collecting the PILOT dollars year-to-year, the Mayor is going to take a loan against all of these future payments so that he can have and spend all of the money right now. This is why I keep telling you all it’s a payday loan scam.

Can you imagine pulling this same idea with our local option income tax (LOIT)? I don’t have the precise figures on how much that 1.62% LOIT brings in annually, but say I'm mayor, and I say, "Hey, we know for a fact we're usually around $200 million. What if we go find a private company that will give us $100 million now for the next ten years instead? This is basically what we're looking at, folks.

You WILL pay for every dollar of this in the form of higher sewer rates, but guess what? When it comes time to hold the guy who hoisted this onto you accountable, he'll be out of office traveling the globe with his wife. And therein lies the diabolical genius of the Mayor's plan. He'll sell us all on how we need to take political decisions out of politicians' hands because they won't "do the right thing" and ask for tax increases when they're needed, but he'll make certain whoever follows in his shoes has to do exactly that by taking away what would otherwise be general fund revenues for the City.

Also, while I don't want to get conspiratorial on anybody, if you have a Cit Gas board comprised of the Indy business elite, might it be a stretch to envision a Board deciding to press as hard as possible for rate increases during the term of a progressive mayor they want to make a one-termer? I say this because non-profits are some of the most "political" orgnaizations in existence, and a quarter of the citizenry will still try to blame the Mayor for every rate hike, even though they're told repeatedly it wasn't his/her decision, and the rest will just have some Carteresque malaise that colors the rest of the voters' opinions about life in the big city under Mayor x/y.

Coming soon....what political insiders are supporting this deal and why

The Mayor's Magic Water Deal

iPOPA Thanks Mainstream Media, Fellow Bloggers for Catching Up; Speaks on City-County Councillor Folly

When I tell my wife she looks amazing, she thanks me, but I’ve noticed it's only when her friends tell her the same thing that she finally believes it. I guess if you expect compliments as part of the marital pact, it's only when "outside validation" occurs that something becomes really true.

Bloggers have that same kind of relationship with the mainstream media.

Earlier this week, the Indianapolis Star's Francesca Jarosz wrote a stellar analysis yesterday detailing how the Mayor's funding for sidewalks and roads through the Cit Gas transfer is basically a hidden tax increase because it would necessitate higher future rates.

Both of my closest blogger buddies, Terry Burns at Indianapolis Times and Jon Easter at Indydemocrat, posted praises here and here and Advance Indiana, my colleague from across the aisle, followed suit, as if Jarosz had discovered the rosetta stone of MOU's.

I'm green with envy because here's what I wrote about Citizens Gas and the Mayor’s water deal on March 20, 2010:

Or how about this. Why (doesn't Citizens) just assume the debt and forget the $262 million? [Ed. Note: I never bought the $425 million]. We all know the cash is just an advance against an even higher, future rate increase. Why not forget the cash and have lower rates in the future, Mr. Mayor?

One day you all will believe me when I say your shoes look nice. Sniff.

For his part, Democratic Mayoral candidate Brian Williams continues to raise pertinent questino about the deal, and the one that's captivated my imagination at the moment is the fact that City-County Councillor Mike Speedy's resolution has the council voting on a memorandum of understanding (MOU), NOT the final agreement. What is the difference? An MOU is how the parties hope things will work out. A definitive agreement contains the actual, final terms, so we'd know what we're actually getting, not a guess.

Think about that. There are members on the City-County Council who are voting for a "general idea." Can you imagine a Republican member of Congress voting for "healthcare reform" generally with all the actual details to be worked out later by the Obama administration? Of course not.

You say, yeah, but iPOPA, I'm sure votes were definitely cast with an intent of changing the reform bill later. Fair enough, but you prove my point. Congress can always make a law better. Once the City-County Council says, "Do the deal," they lose authority to say anything. What Councillor in his or her right mind would totally abdicate his or her oversight role by voting for something that is NOT the final product?

Stay tuned for...

...who in the Democratic caucus is looking to jump the fence on the Mayor's water deal; and

...iPOPA's Weekend Political Round-Up (an overview and commentary of all pre-primary political activity at all levels)

iPOPA Thanks Mainstream Media, Fellow Bloggers for Catching Up; Speaks on City-County Councillor Folly

Councillor Speedy Lives Up To His Name; iPOPA Asks, "Where's the Fire?"

Maybe City-County Councillor Mike Speedy should change his name to Mike Premature.

Today he filed a proposal to transfer the City's water and wastewater facilities to Citizens Energy Group. Here's the problem, and let me say this as clearly as I can: the principals have not completed the due diligence on this deal yet. What kind of city-county councillor would authorize this transfer without first knowing fully the final terms for settlement and having a full accounting of the risks?

I also have to wonder why Mayor Ballard is pressing ahead so urgently. Hmmm. Has anybody heard of any impending deadlines for paying anything that might make it important to get this deal to closing quickly so he can get the cash ASAP? Hmmm.

It struck me as odd that the guy who introduced this resolution is the one who's bailing out of the city-county council to take over Mike Murphy's Indiana House District 90, but if you look at Speedy's website, you know this deal is rife with Speedy's "political currency" - sewer bragging rights. Speedy notes, "My accomplishments include securing funding for over $13 million in construction projects for street re-surfacing and sewer projects."

Imagine the largesse Hizzoner will dole out to Speedy for carrying his water (no pun intended).

Councillor Speedy Lives Up To His Name; iPOPA Asks, "Where's the Fire?"

Navistar Clawback Cave Another Mayor Ballard Sellout for Immediate Financial Gratification

Ever notice how politicians who make the most references to doing things for "our children" or for "our future" are often most eager to sell out that future for their immediate political benefit?

Take Greg Ballard. Literally.

The Citizens Gas water deal? You've heard me ad nauseum on how we're mortgaging future water rates for sidewalks now.

But I predict you’ll see a similar story on downtown parking meters soon. The City wants to lease them to a contractor. Such a deal could pay a percentage of total dollars collected each year or a flat fee each year. But I foresee the mayor taking a lump sum up front in exchange for a lease term lasting the remainder of his permissible time in office times two.

(Maybe that’s why the Mayor is so confident that he won’t use the Cit Gas money to pay the $15 million in Conseco maintenance costs for the Pacers. He knows the money train is choo chooing into town).

But there are other indicia of Mayor Ballard's short-term fixation.

A few weeks ago, the Indianapolis Star’s Ted Evanoff reported on the City’s Navistar “clawback.” For the uninitiated, when city officials kowtow to business owners by giving them tax breaks, they do it frequently under the condition that a certain number of jobs will be created.

Indianapolis gave Navistar $18 million. When Navistar tanked and laid off 1,000, the City went to get its money. Navistar said no.

From the story:

When Navistar refused to repay the money, the city faced a long dispute in court. Rather than run up a big legal bill, Mayor Greg Ballard’s administration agreed the city would accept $5 million from the company.

First, the Office of Corporation Counsel is all sunk costs. The City pays the same amount to its lawyers whether anybody in the office works or not. So what the Mayor is admitting is that nobody in his office can litigate a contract case? Yow! That’s scary.

But for the sake of argument, let's run with his idea that his folks are too incompetent to handle this. Say litigating the case could have earned Indy an additional $4 million, or half of what we were promised. If so, eight Indy attorneys billing $250 per hour could each spend 10 hours per week every week for two entire years, and we'd still double our money.

Can any attorney out there conceive of how a contract interpretation case could have required more work than that? I can't envision how one would cost more than $250,000.

In short, the Mayor could have gotten the City a LOT more money, but he took pennies on the dollar. What good would more money do him if it didn't come until his successor occupied the 25th floor of the City-County Building?

Navistar Clawback Cave Another Mayor Ballard Sellout for Immediate Financial Gratification

Barth On Water Deal: "Independent Analysis Needed"; iPOPA on Town Hall: "Well-Orchestrated, Mayoral Pimpage"

Democratic at-large city-county council candidate, John Barth weighed in on the Mayor's water deal this week. (No, that's not him to the right. That's pimp legend Don "Magic" Juan).

Barth, the Compliance and Regulatory Affairs VP for Managed Health Services, takes on the Mayor for not being more transparent about the details (and risks) of the deal and for holding only four public meetings. Barth also calls for an independent, outside analysis of the deal.

It has become a meme among some Democrats that there are few, if any, people who can give the party (and the public) the straight dope because so many of our prominent Democratic attorneys have had their law firms gobbled up in this deal.

After attending the Mayor's presentation at Nu Corinthian Church this week, I can see why outside assistance is needed (and immediately). We are getting snowed and owned by the Mayor's PR might.

Aside from the accoustics being so terrible that it was like listening to Charlie Brown's teacher for an hour-and-a-half, the format was set up to keep us in the dark while giving the appearance of blazing sunlight.

Permit me to explain.

After the presentation, Mayor Ballard and Cit Gas CEO Carey Lykins took every question, including one that asked the Mayor to state point blank that none of this money would go to pay the Conseco maintenance (he did).

But the problem is that the format didn't allow for the follow-up questioning that is critical to understanding the devil-packed details of this deal.

For example, I asked whether Cit Gas had cash reserves, and if not, whether it would be fair to say the purchase would be financed by rate hikes. The part of the response I heard was that no, Citizens Gas didn't have cash sitting around (if they did, they'd have to give it back to rate payers), and something about bonds being issued based on the expected "synergy" savings, yada yada.

To paraphrase, say I own a company and my annual budget is $100 million, and I get $100 million in income from rate payers. Then I do a consolidation that makes my costs $60 million. The next year, I'll have $40 million on the upside. I have two choices that next year and every year thereafter: (1) reduce rates; or (2) keep rates the same as before the consolidation and "monetize" the savings by picking a number of years arbitrarily and saying, "Cit Gas, pay me the savings we'd get over, oh, ten years, but give it to me now in an insanely discounted lump sum because "it's my money and I need it now" to help me get re-elected!"

Because I foolishly phrased my question as "won't we pay for this with higher rates," Mr. Lykins could say "no" and be absolutely right because we'll pay for this through the absence of lower rates, which for crafty word twizzlers like the Mayor, is a completely different thing.

The same thing applies for the Conseco question. The Mayor could say, "None of this money will go to Conseco" because nobody could follow up with, "Are you saying you wouldn't take money already budgeted for, say road construction, and use that to pay the CIB because now you can pay for the construction using these dollars?"

Perhaps the most insane thing uttered was a comment the Mayor made of extreme indifference on whether the due diligence should be completed before the City-County Council would vote to approve the deal. Does that make sense to anybody breathing?

The Mayor also talked about how this deal will create 10,000 construction jobs. (Cough - bovine feces - cough!) He got his number based on some INDOT study that says $x spent equals y jobs "created." But he said at the meeting that some of the dollars will be used for abandoned houses and some will be used for some non-descript economic development venture to lure companies to the city. How can you claim 10,000 unless you know how the money will be spent? The Mayor has no problem using figures that are inconsistent, even within the framework of his own methodology.

Understand that only 10% of my concern about this deal surrounds irrevocably giving up authority over the water company. In this respect, I may be in the minority.

My concern is that it's a completely lousy deal on the financial end. If this is a long-term solution that will save $40 million per year, why not have Cit Gas pay the city $20 million per year in perpetuity and put it into a construction fund? If they know they can get those savings, why couldn't they commit to that?

See folks, all this is about is the Mayor being able to say "10,000 jobs" and "This sidewalk (coming soon) brought to you by Greg Ballard."

And in one of the most cynical ploys I've seen of late, the Mayor's website and the packets at these forums have questionnaires about how we spend the money that we haven't even gotten authorized. "Pardon me, Joe Citizen. Do you want to spend your millions on sidewalks or streets? Rate it for me."

The Mayor wants people to walk out of these meetings salivating over what they'll be getting (just like how my mom used to get me to behave by showing me toy catalogs in March), then those folks will beat up their Councillors if they oppose this.

You don't think these meeting locations are tactical?

George Washington HS Cafeteria,
2215 West Washington Street

Aldersgate Free Methodist Church,
9035 East 21st Street

Nu Corinthian Church’s Family Life Center,
5935 West 56th Street

Lynhurst 7th and 8th Grade Center,
2805 South Lynhurst Drive

Where's the meeting in Perry? Franklin? Decatur? North Central?

No, this is straight up, grade-A mayoral pimpage. Hizzoner is going to get you strung out on the smell of that new concrete in your broken down neighborhood, and you'll forget that you're getting financially back-handed long-term through his payday loan scam.

Barth On Water Deal: "Independent Analysis Needed"; iPOPA on Town Hall: "Well-Orchestrated, Mayoral Pimpage"

Brian Williams' Lonely Voice On Water Deal

Let me start off by saying that I obviously can't read or hear every TV news segment, radio interview, newspaper story, blog post, or even press release, so this might be a case of selective reception on my part. But when I try to list elected or want-to-be-elected Democrats opposed for any reason to Mayor Ballard's effort to sell our city's water assets, the inkwell dries up quickly.

As of yet, no opposing voice has emerged from the City-County Council, which is strange given that the Mayor will wrap up his four "town-hall meetings" with one this Tuesday (6:30-8:00 p.m., Nu Corinthian Church's Family Life Center, 5935 West 56th Strett) and the last the Tuesday thereafter (6:30-8:00 p.m., Lynhurst 7th & 8th Grad Center, 2805 South Lynhurst Drive). Actually, City-County Councillor Jose Evans was the first to get "into the water" by twice questioning the management of the city's water, and he questioned the deal generally on the Amos Brown show.

But when it comes to what I'd call a thoroughly substantive critique, there's one name in the game - mayoral contender Brian Williams.

Williams tells specifically why the deal is perilous, and he continues to raise the right unasked questions. If you want to see Williams' most recent tug on the curtain of Ballard's faux financial wizardry, read below.

April 8, 2010 Statement[1]

By virtue of his opposition, Williams is garnering media attention.


My fellow Democrats might ask how Melina Kennedy, our party apparatus's perceived frontrunner, can cede this much mic time to her most formidable rival?

She has no choice.

This is one of the tragic drawbacks to being an attorney at Baker & Daniels, one of, if not, Indy's largest law firm. By virtue of being an attorney there, and by virtue of B&D representing one of the principals, she is bound by the rules of professional conduct, and she cannot speak ill of the deal, even if she were so inclined.

Williams clearly knows this, which is why he has repeatedly referred to this deal as the most significant enterprise Mayor Ballard has undertaken. Call it self-serving if you will, but Williams is right, whether you view this as being the result of the enormity of the water company deal or the paucity of other sizeable mayoral accomplishments. What we can say is that every time Williams publicly talks about the deal, somebody unaware of the Baker & Daniels/Melina conflict might think, even if just subconsciously, "Where is Melina?"

And what makes the forced silence more intriguing is that one of the board members for Citizens Gas is Anne Nobles, a senior VP at Eli Lilly who also serves as Melina's campaign chair. (In the interest of full disclosure, Anne was also my mother's boss when she worked for then Governor Evan Bayh, and Anne is one of the most brilliant people you'd ever meet). Because of Melina's current employer, we don't know whether Melina would have shown her moxy and gone womano-a-womano with a powerful friend. I think Melina could have held her own in such a debate, but we'll never know.

This is maddening, mostly because I always get wanked when I see Republicans do something to us that we've done to them.

You see, back when Bart Peterson was Mayor, the expression "getting Keelered" was ushered in. The Marion County GOP Chair, John Keeler, was working as an attorney at Baker & Daniels, and because the city had the firm on retainer, Keeler couldn't chastize Peterson. It was like having a political criticism immunity card card for two years.

We see the same thing here. Whether it was driven by shrewd politicking or simply the natural outgrowth of having so many big players in the Cit Gas deal, every big firm in Indiapolis with anyone inclined to say "Wait a minute," including my party's perceived frontrunner, has been gobbled up.

Let's just hope Melina can get out of the stomach of the beast before the Mayor cooks up his next big idea for public consumption.

UPDATE: I did not wish to imply that the Democrats on the City-County Council have done nothing, as Minority Leader, Joanne Sanders, submitted a resolution on behalf of the caucus requesting an open and transparent discussion of the sale. But this resolution can be fairly described as a "process" resolution, not a substantive critique akin to what Williams has provided. It is curious that the hearing of the resolution before the Rules & Public Policy Committee is set for 5:30 p.m. on Tuesday (Room 260 of the City-County Building). This is one hour before the townhall on the far Northwest side. Great way to guarantee maximum participation by Democratic councillors at the Mayor's little forum - creating a potential scheduling conflict for the caucus members.

Brian Williams' Lonely Voice On Water Deal

IBJ Asks Brizzi to Step Down. Mr. Mayor, Governor?!? Where are you?!?

Today, the Indianapolis Business Journal joins the cavalcade of folk asking Carl Brizzi to hang up his spurs.

From today's editorial:

Brizzi, 41, now is dismissing calls for his resignation from leaders of both parties as “ridiculous.” But we join the chorus calling for him to step down and are incredulous that he’s trying to hang on until his second term concludes at year-end.

Consider what Brizzi himself wrote to supporters in December, as he was taking heat for his brief stint as a director of Fair Finance Co., an Akron, Ohio, firm co-owned by Durham that government investigators now suspect was a Ponzi scheme.

“As a public official, I am, understandably, held to a higher standard—and any association or action is subject to greater scrutiny,” Brizzi wrote.

Indeed, it’s hard to imagine an elected position in Indiana where impeccable ethics is more essential. As the top prosecutor in the state’s largest county, he has a tough job. His effectiveness is hindered if other players in the process—from deputy prosecutors and defense attorneys to defendants and sitting judges—perceive him as tainted by scandal.

To be sure, not everyone calling for Brizzi to step aside has the purest of motives. Republicans are eager to distance themselves from a politician with no political future. And Democrats are eager to use the controversies involving the prosecutor to cast doubt on the integrity of the entire GOP. The stakes are high as Democrats seek to return to the high-profile post for the first time in 16 years.

But this is more than a bunch of political posturing. Brizzi ruined his political career through his own bad judgment. Those lapses have hurt Brizzi’s ability to do his job—“to relentlessly pursue the bad guys,” as he likes to say. It’s time for him to stop putting his own interests ahead of the city’s and step down.

Amen, IBJ. I know it will hurt my Democratic party to have Mark Massa take over now, and he'd be all but a lock as the replacement. But if there's any officeholder who must bestow confidence upon the public at all times, it's the one holding the scales of justice. As I reported yesterday, it's time for Brizzi to take his thumb off of those scales.

Also, why haven't Mayor Ballard or Governor Daniels joined the call? Okay, let's be frank. Mayor Ballard probably doesn't know Carl Brizzi has problems because nobody's put it in a comic book yet. But the Governor? Why hasn't Indiana's biggest GOP bat taken a swing? Doesn't he care about the mockery this office has become? Or is he simply too afraid that his growing national political clout will look feeble if Brizzi completely ignores him? Or, is it something much more personal?

So what's the deal, Governor? We're listening.

(Tumblewoods blow past).

IBJ Asks Brizzi to Step Down. Mr. Mayor, Governor?!? Where are you?!?

Mayor Greg Ballard Selling Indy on Payday Loan With Water Deal

I hate payday loan companies.

They sell people on getting "money fast," but they never talk about how they're hosing futures by making people give up an insane slice of future earnings. A typical payday company will charge $25 per $100 borrowed, even though they'll get their money back in two weeks in most cases. Even if they gave you 30 days to pay back the loan, you would still be paying an annual percentage rate of 455%.

So why do people do it? Because they're desperate. You give them a whiff of money, and they can't say no.

Welcome to Greg Ballard's new strategy for getting support for the sale of the city's water and wastewater facilities to Citizens Gas!

The website for the City of Indianapolis lists "public meetings" to be held on this deal. They are:

March 29 - 6:30 p.m. - 8:00 p.m. - Aldersgate Free Methodist Church, 9035 E. 21st Street

April 13 - 6:30 p.m. - 8:00 p.m. - Nu Corinthian Church's Family Life Center - 5935 West 56th Street

April 20 - 6:30 p.m. - 8:00 p.m. - Divine Savior Lutheran Church - 7315 East 75th Street

But what intrigues most are two quotes by the Mayor:

Public involvement and accountability are imperative to the success of this transfer. This process began more than one year ago with the formation of the Infrastructure Advisory Commission and will continue with transparent study and public deliberation.

Mr. Mayor, you say you will "continue public deliberation," but when did the public ever get to weigh in on how much money the City would receive, when, and in what form?

As I've said before, my criticism (and most I've heard), is not on whether Citizens' charitable trust structure makes the most sense going forward. Rather, this is about the deal's terms, and you won't entertain thoughts that you're making the city take a payday loan from Citizens Gas. Here, instead of giving away a huge chunk of a future check, you're giving away our city's most valuable resource permanently.

When you talk about "the sucess of the transfer," it's clear your mind is made up. So why even have these public meetings?

First, because the terms of the deal were crafted in secret. Yes, people knew the Mayor had solicited expressions of interest (EOI) on how to do things better, but nobody save the Mayor's people, the parties, and a slew of big downtown law firms have had any say on the deal's terms. So now you have to engage in this after-the-fact exercise so your critics cannot attack your process.

But there's more, and Mr. Mayor, you are so very crafty. Unfortunately, you tipped your hand when you said:

As we move forward with due diligence and explore how to invest the $425 million earned through the transfer, we want to hear from residents, who live in the neighborhoods with crumbling streets, curbs and sidewalks, about their infrastructure investment priorities.

Will Marion County residents really fall for this? The Mayor wants you salivating over the new streets, curbs, and sidewalks, and he wants you to "buy in" by "putting you in charge" of what gets done. This way you'll tell your city-county councillor to go along. You won't think about the absolutely crappy terms he has negotiated for you, and more importantly, there will be a psychic link between you and that construction truck you see pouring new sidewalk. You'll think, "This sidewalk brought to you by Mayor Greg Ballard."

Feel free to revel in that euphoria. But remember that when you see nothing's left of the city's paycheck when it comes in the future, I told this would come to pass.

The Mayor won't.

Mayor Greg Ballard Selling Indy on Payday Loan With Water Deal

Mayor's Citizens Gas Deal: Intriguing Idea Marred by Brazen Hypocrisy & Political Cowardice

If you didn’t hear me on Abdul in the Morning this past Monday morning, let me share that the Mayor’s proposal to sell the city’s water and wastewater companies to Citizens Gas makes sense intuitively.

Who wouldn’t automatically think that a non-profit structure, specifically a “charitable trust” like Citizens Gas, must be more efficient than a private company because they don’t have evil stockholders to placate. (Of course, one would think this mentality might compel Republicans to favor a single-payer healthcare system over for-profit insurance companies, but I guess Republicans only like profit motives on healthcare, not on utilities).

It’s also a PR masterstroke. The phrase “charitable trust” makes you think your grandma will be providing your drinking water now. (Heck, if the City could give Brighthouse to a “charitable trust,” maybe I wouldn’t have my six favorite channels intermittently disappearing while I continuously call to get a four-hour window for “service” at times I’m never home because I have a job).

But the prospect that this deal favors the city is obscured by the fact it is the most brazenly political, hypocritical, and cowardly act undertaken by an elected official in Indianapolis since Unigov was implemented.

The terms are these. The City of Indianapolis will receive $170 million at closing, then $90 million on October 1, 2011. In addition, Citizens Gas will assume $1.5 billion dollars worth of the city’s debt. This is why people keep talking about a $2 billion dollar deal.

Folks, the "$2 billion sale" figure is false, no matter how many times Abdul and the Mayor say it. If you read the Memorandum of Understanding (MOU) between Citizens and the City, you will see that Citizens Gas will only move forward with this deal if the Indiana Utility Regulatory Commission (IURC) permits the assumption of this debt to be figured into its rate structure. In other words, you won’t save dollars because this debt is assumed. You’ll just pay it in higher water and sewer rates instead of in higher taxes.

And this is precisely the Mayor’s goal. Mayor Ballard wants this deal because elected officials won't do the right thing by raising taxes to invest in necessary water and sewer infrastructure improvements if they know they are going to get attacked politically.

From the Mayor at his press conference:

Let me be clear. This solution works for the long term. With this, we will take politics out of running our water and wastewater systems. No more politicians putting off doing what is right for the long term for what is politically expedient today.

He’s wrong about the first part because Bart Peterson in 2005 sought a $350 million bump in water and sewer rates for these very enhancements.

In other words, there are courageous “politicians” who will say, “We need this, and your rates are going to have to go up.” Mayor Ballard just is not one of them, apparently. But his remarks to the Star about how politicians will be attacked for doing the right thing is dead on, and he knows. You know how? Because he did it against Bart Peterson. In 2007, Ballard banged Peterson for repeatedly “raising taxes,” and he included in his list every water or sewer increase sought by the city.

Simply put, Mayor Ballard is the guy who robs the store and then tells the owner, “You better get a security system.” I try to keep this blog analytical, but I can’t contain myself. Among all politicians and strategems I’ve seen at all level s of government, nothing compares to this for pure political cowardice.

Even the underpinning of this deal is based on a distortion of history. The Mayor is fond of saying that Citizens Gas was founded as a public trust to avoid having rate decisions made by politicians. Here’s a term of art for your, Mayor. That’s crap.

According to Citizens’ own website, the trust was founded principally to avoid the city having its natural gas supply taken over by monopolist robber barons. Now, it is true that there was concern about political patronage, but that had nothing to do with retribution for setting rates and everything to do with fear of the mayor’s brother with no background in natural gas systems running the whole show and blowing up the city. But last time I checked, quite a few decade had passed since Tammany Hall. In other words, the concerns about re-election that concern Cowardly Greg aren’t the concerns that animated Eli Lilly back in the day. Of course, Lilly was a leader.

But, iPOPA, you say. This can’t ALL be about politics. Aren't there cost savings?

Sure. Not having to earn a profit is good, and the trust can issue tax-exempt bonds (though the city could also, I believe). But the main alleged advantage to this deal is that by consolidating utilities, we achieve “synergies” (the most hackneyed phrase in management, by the way) of $40 million per year. Again, intuitively, this makes sense. If you fold three companies into one, you won’t need three HR, IT, or legal departments. But $40 million?!? Even the Mayor doubts this.

More from Mayor Ballard’s press conference:

Reporter: Any promises with rates?

Mayor Ballard: Not at the moment. We’ll have to look at that. They’ll be lower than previously forecast. I think we…that’s pretty much in there. That’s one reason we’re doing it.

The Mayor regarding “synergy savings”:

Mayor: If there are some synergies later on, I think you said, I think the Star said today lawyers and IT. Maybe, maybe not. It’s up to them. People still have to do the work. The systems still need to be maintained. So I mean, I hear a lot of that when we do things within the city, but you never see it happening. It’s just all speculation.

In other words, Mayor Ballard is only able to speculate that rates will be lower than they would be without the deal (though still going up massively), but he can’t tell you how they got to the $40 million in savings per year, nor does he even believe it. Do you?

But here’s the most troubling part. How did the City get the $262 million purchase price? Why isn’t that report on-line, Mr. Mayor? How do we know we’re not getting rooked for turning over our water supply in perpetuity?

Also, why the lump sum? The Mayor repeatedly called this a long-term solution. So why aren’t we having the savings paid out over time, like over the 50-year period the Mayor referred to at his press conference? If Citizens will save us $40 mill per year, why don’t we have them pay us $35 million per year indefinitely? They’d still save $5 million off their operating costs, wouldn’t they?

Or how about this. Why don’t they just assume the debt and forget the $262 million? We all know the cash is just an advance against a higher future rate increase. Why not forget the cash and have lower rates in the future, Mr. Mayor?

Here’s why. If Citizens Gas doesn’t give up the $262 million, Mayor Ballard can’t put up little signs telling you about the new sidewalks he’s going to start building in your neighborhood right before his re-election. That’s what this is principally about.

From the Mayor’s press conference:

We will use the cash from this deal to make a transformational investment in our city’s infrastructure. Roads, bridges, and sidewalk needs, many of which have been neglected for a generation, would be addressed.

A true leader would have not permitted this neglect to continue once he took office. And a true leader would ensure a revenue stream from this sale for 50 years and beyond. But Mayor Ballard has never been that.

I promise you that if members of the City-County Council said, “Mr. Mayor, we’ll vote for your deal, and in exchange, you forego the lump sum and spread the benefits out over time,” he wouldn’t do it. He wants to finance his re-election on your future rate hikes, folks.

But, iPOPA, you say, “If the Mayor does this deal and rates go up now so Cit Gas can pay for the $262 million, the Mayor will get creamed in November, 2011."

Oh, did I forget to tell you about how the Mayor ensured that wouldn’t happen? Here’s another quote from the the Mayor's press conference:

Additionally, after acquiring the water system in 2002, the city flat-lined water rates for five years while simultaneously taking on more debt than the system is worth.

Sentient beings might conclude that the Mayor is faulting his predecessor for negotiating a deal where rates stayed the same for five years while debt went up from necessary improvements. But do you know the MOU has a two-year rate freeze following closing on this deal?

Think about that.

While saying how bad rate freezes are, the Mayor’s deal includes one, and a two-year freeze specifically means there will be no more rate increases in 2010 or 2011, which – well, what a surprise! – would mean no rate increases until after the November 2011 election. To quote The Church Lady when she referred to Satan: “How conveeeeenient!”

Of course, it’s probably not all that likely that a rate increase would be needed in 2011 though. Look at this exchange from the press conference:

REPORTER: Do you support the current rate increase that’s before the IURC?

CAREY LYKINS (Cit Gas CEO): No, I’m not a part of it, and I’m not familiar with the details of it. I would presume that it’s all necessary and required, but I have not seen the case.

Doesn’t it seem like Mr. Lykins is disinterested? So why does the MOU state that this deal only moves forward if the IURC outcome is one that Citizens Gas views as “favorable?" "And which outcome IS favorable to Citizens?" I ask in jest, knowing they want that 35% increase in rates because it will probably cover a huge chunk of the $262 million.

Not convinced yet that your Mayor is out to lunch? Here’s another great line from the Mayor’s press conference:

In 2008, the water system proved unable to correct itself without huge rate increases.

I’ve heard of anthropomorphism before, but is anybody else surprised to learn that water systems have the ability to correct themselves without any humans, especially a mayor, being involved? Unfortunately, this “little water system that could” just couldn’t correct itself without first imposing a huge rate increase on itself.
Another classic:

REPORTER: Mayor, you mentioned taking politics out as a positive thing. How can you insure accountability and any guarantee for ratepayers under this deal?

MAYOR: Utilities were created, just as Carey said, utilities were created for a certain reason in cities and municipalities across the country. A lot of that reason was to take politics out of it, so that the interest of the municipality, the city, is looked after in the long term. They are extremely accountable. Extremely accountable. You talk to any utility, and they will tell you, they’re accountable, and they will be.

I bet if you talk to Bernie Madoff, he’d tell you investment brokers are very accountable, too.

Another zinger:

We will look at greatly enhancing our connectivity with greenways and bike lanes and may look at addressing unsalveagable, abandoned homes.

Silly me. I thought the Mayor made abandoned homes one of his campaign priorities. Now he's letting you know that he might look at it now if he gets this $262 million. What happened to "cutting the fluff," Mr. Mayor? Can't you use all of the efficiencies that you boasted about being able to find for abandoned homes?

Finally, let me ask a simple question. Mr. Mayor, the contracts with Veolia and United Water both had minority business enterprise and women business enterprise mandates. I didn't see that in your MOU. Are you turning your back on MBEs and WBEs?

If the devil is in the details, this deal isn't getting my blessing until the Mayor exorcises its craven and hypocritical political components. I'll let the cowardly ones slide. I've come to expect them.

Mayor's Citizens Gas Deal: Intriguing Idea Marred by Brazen Hypocrisy & Political Cowardice