The Capital Improvement Board hopes a formal proclamation it adopted Monday will deter some City-County Council Democrats from moving forward with a plan to tap its coffers to plug the city’s budget gap.
Council Vice President Brian Mahern is leading a charge among Democrats who want to collect “payments in lieu of taxes” on CIB-operated properties in Indianapolis.
The so-called PILOT fees would be collected on properties that are exempt from property taxes, including the Indiana Convention Center, Lucas Oil Stadium, Bankers Life Fieldhouse, Victory Field, Capital Commons and a Virginia Avenue parking garage.
It's not yet clear how much the payments could raise. City officials are looking for ways to close a $65 million shortfall in Indianapolis' $595 million general fund, which covers daily operating expenses.
The once-cash-strapped CIB expects to have a balance of about $67 million by year’s end. But the municipal agency’s president, Ann Lathrop, insisted that much of the reserve—$52 million—is earmarked for debt payments and improvements to the properties.
“Once you peel those two out, you still have mall investors and a state loan,” Lathrop said of the CIB’s additional obligations.
More than $33 million in Circle Centre mall investor loans come due in 2017 and a pair of $9 million state loans mature in 2019 and 2020, adding to the CIB’s debt obligations. In addition, city tourism bureau Visit Indy needs financial help to replace a $2.5 million grant to market the Indiana Convention Center.
And without sufficient cash reserves, the CIB likely would cut contributions it provides to the Indiana Black Expo, Indiana Sports Corp. and Indiana Arts Council, Lathrop argued.
CIB members voted unanimously to pass the resolution, reiterating their stance against any attempt to tap the agency’s reserves. City-County Council President Maggie Lewis, a CIB member, was absent from the Monday meeting.
The council’s municipal corporations committee, meanwhile, could vote Thursday on the PILOT proposal. If approved, the measure would be included when the full council votes on the city budget Oct. 15.
Mahern said the additional CIB funds could be used to fund a police department recruitment class and to help offset a proposal from Republican Mayor Greg Ballard to eliminate the homestead credit to save $8.1 million in the budget.
Both Mahern and fellow Democrat council member Monroe Gray, who chairs the municipal corporations committee, think it’s only fair that the CIB provide some assistance. They say the city provided the CIB funds from the downtown tax-increment financing district when it needed help.
“Personally, I wasn’t excited about giving the CIB a helping hand a few years ago,” Mahern said, “but we did.”
Gray said Democrats aren’t targeting the CIB’s entire $67 million reserve but declined to reveal an amount that would suffice.
“At this stage, it’s just a discussion,” Gray said. "We haven’t even polled the Democrats on who would be able to support it. But it would probably be a party-line vote.”
Five Democrats and three Republicans make up the municipal corporations committee.
Facing a $47 million deficit in 2009, the CIB recovered financially by cutting millions in operating expenses and getting help from the state that included the $18 million in loans.
Now that the CIB is on better financial footing, members are reluctant to take any risks, especially when it involves skimping on building improvements that could jeopardize the city’s ability to attract large conventions.
“Our buildings are what we win with,” Visit Indy CEO Leonard Hoops said. “People are not beating down the door to get to Indianapolis because we’re Indianapolis.”