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City still crunching numbers on justice center savings

March 12, 2015

Indianapolis Mayor Greg Ballard’s deputies are finally revealing the numbers behind the promise that Marion County can build a $1.7 billion criminal justice center without a tax increase.

And they are a work in progress.

As recently as Feb. 24, Ballard’s team presented to county officials and city council members a scenario in which they would be $5.6 million short of the first payment that's due to proposed vendor WMB Heartland Partners in 2018. Ballard's team worked with criminal justice agencies—especially Sheriff John Layton—to close the gap, but some of the budgeted savings hinge on hard-to-predict operations costs, such as arrestee health care.

Deputy Chief of Staff David Rosenberg said the important thing is that the sheriff, courts, county clerk and community corrections all agreed that the financing plan is doable. “We’re confident in our solution, that it works for the taxpayers; it works for the agencies,” he said.  

WMB Heartland would finance, design, build, operate and maintain a new courthouse and detention facilities on part of the former General Motors stamping plant site west of downtown in exchange for guaranteed annual payments of $46 million to $49 million a year.

Ballard's deputies have always promised that any such public-private partnership would be "budget-neutral," meaning the city can use the money it now spends on current jail and courthouse operations to build and run a new center. But they wouldn't walk through the numbers. That's changed, now that they have a preferred vendor lined up and need the City-County Council's approval.

Rosenberg said he hopes to see the council vote on the 35-year, $1.7 billion contract with WMB Heartland by April 20.

The new financial plan, dated March 10, shows the city accumulating $11.6 million in savings through 2017, and then exceeding the amount needed each year by an amount ranging from $700,000 to more than $2 million.

The main source of savings is expiration of a contract to run Jail II, which will net about $20 million a year.

Ballard’s team also expects significant savings from not paying rent for jail facilities (about $6 million a year) and reducing the sheriff’s payrol ($6 million to $7 million a year). Layton, who has promised no layoffs, thinks he’ll need half as much staff to guard the same number of inmates because of a new jail’s modern design.

But the agencies, especially the sheriff, needed to find even more savings to close the gap on the annual payment. One reduction the sheriff is counting on is cutting the cost of medical care for arrestees, a long-standing trouble spot in his budget.

The sheriff is responsible for the bill, but it’s Indianapolis Metropolitan Police Department officers who decide whether to send an arrestee to the hospital.

“I think the health care area is ripe for savings,” Lt. Col. Louis Dezelan said.

The sheriff’s office is paying to send 2,000 people a year to Eskenazi Health, he said, yet 92 percent of them are not admitted. Dezelan said the sheriff’s office continues to work with IMPD to ensure those ambulance runs are necessary, but, he said, “You can’t put a hard fast figure on what you could save.”

The city’s latest projection shows the sheriff saving $5.8 million on inmate and arrestee health care, now through 2017.

The sheriff also hopes to save about $2 million a year, starting next year, through state legislation that would make inmates eligible for Medicaid. Senate Bill 212, authored by Sen. Patricia Miller, easily passed out of the first chamber and is due for a hearing in the House Public Health Committee.

Ballard’s team is also counting on some new sources of revenue. Their plan assumes earning $3.5 million a year on parking fees at the new justice center.

Part of Ballard’s vision for the new justice center is to free up land downtown that’s currently occupied by the jails. Rosenberg has always said the financing model didn’t assume a windfall from those real estate sales, but the latest plan assumes more than $3 million from selling the arrestee processing center, Jail I and Jail II.

Rosenberg said the land sales aren’t needed to make the numbers work. If they don’t pan out, he said, the city would draw from the savings it expects to bank leading up the facility’s opening in mid-2018.

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