Monday, April 12, 2010

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.



Leslie said...

You're right about the meetings being scripted and controlled; no opportunity for follow up questions. I hope the public realizes it's being played before it's too late. Even just spending an hour or two here and there reading about the agreement, you and others have identified serious flaws in the deal. Has anyone requested the reports and analyses referenced in the MOU? Then perhaps we could get a second opinion on the financial aspects of the deal. Keep up the pressure.

Anonymous said...

If they are going to realize $40 Million in savings, why not put that all back into reducing the incredible water and sewer rate increases we are going to see? If we are going to see higher rates no matter what, why not do all we can to keep them as low as possible? Otherwise it is a tax increase. It is like this Mayor is using the fact that rates have to go up as an excuse to raise them even higher. He assumes no one will know the difference.

Unknown said...

I love the picture.

Alex Ralston said...

"Economic Development"
Abandoned Homes

According to the mayor, basically every long-standing City problem will be solved by the sale of the Water Company. It's like a magical printing press for money.

Or a great big campaign contribution.

Anonymous said...

Regarding your question of location for the public forums: I received an email from the Binford Redevelopment and Growth (BRAG) organization saying the the Mayor is having a public meeting on April 20 from 5-6:30pm at Divine Savior Lutheran Church (7315 E. 75th St.) but this contradicts what the Mayor's office is publicizing. ???