IndyGo battling another potential financial hit from GOP as Legislature winds down

Red Line
Passengers board the Red Line at the Julia M. Carson Transit Center on Sept. 3, 2019. (IBJ photo/Lesley Weidenbener)

During the waning days of Indiana’s legislative session, IndyGo will be fighting to quash yet another proposal that would result in a multi-million dollar financial hit on the public transportation system.

A Republican senator won initial approval this week for an amendment that would require IndyGo to pay public utilities to relocate utility services to make way for new transit lines, a move that Democrats say goes against standard practice.

Several Democratic senators fervently spoke against the measure, saying it will hurt IndyGo financially and hinder its efforts to expand rapid transit services. But supporters argued it’s unfair for public utilities to eat the costs of relocating utility lines – and could result in higher costs to ratepayers.

The fate of the Senate-approved proposal is in the hands of Rep. Jim Pressel, R-Rolling Prairie. Pressel, chair of the House Roads and Transportation Committee, now needs to decide whether he agrees with the Senate version of his HB 1191, where the IndyGo amendment was inserted, or objects.

If he agrees, the full House will vote on the amended bill again. If not, the measure will go to a House-Senate conference committee to determine whether a compromise can be reached. Pressel did not answer a request Wednesday to comment on his intentions.

Freeman

The revised bill passed the Senate by a 33-16 vote on Tuesday, the day after extensive criticism from Democrats, some of it aimed at Sen. Aaron Freeman, R-Indianapolis, who introduced the amendment.

They said the measure represented yet another example of the Republican-controlled Senate trying to impose its will on the Democrat-led city of Indianapolis and that it was out of the norm for the city to reimburse utilities for public projects unless agreed to in advance.

“I am upset about this because we shouldn’t even being doing his right now,” said Sen. Greg Taylor, D-Indianapolis, an attorney who specializes in municipal finance law. “Are you really trying to make an $8 million call right now? What’s that you’re going to do for public transportation? Nobody else who moves public utilities has to pay but the public transportation corporation. I wonder why?” the Senate Democrat  leader asked during floor debate.

The amended bill would require IndyGo to reimburse all utility companies for relocating utility lines beginning retroactively with the work done by Citizens Energy, AES Indiana and any others for the Red Line and in the future for the planned Purple and Blue Lines.

An estimate of the total cost for all these projects was not immediately available. But for the Red Line alone, Freeman said the costs was $7.94 million for Citizens Energy and $500,000 for AES.

Taylor

Taylor emphasized that Freeman also had been the author of Senate Bill 141, another measure aimed at IndyGo that failed in the House when Pressel decided not to give the bill a vote because he said not enough time remained to reach a consensus.

The proposal would have withheld 10% of local income tax revenue from IndyGo until it meets a private fundraising threshold established in a 2014 law. It also would have prevented IndyGo from moving forward with expansion projects, like the Blue and Purple Lines, until it gets private funding.

Taylor also pointed out Freeman, when he was an Indianapolis City-County Council member, voted against a proposed Marion County voter tax referendum that city voters passed to jumpstart a mass transit project in 2016.

Freeman denies he’s trying to hurt public transportation, but says he wants IndyGo to be accountable for its spending and live up to its financial commitments made to voters. He said he wants to eliminate the possibility that public utilities, including Citizens Energy Group, would need to increase ratepayers’ fees in Marion County to cover those costs.

“I am all for a bus service – a great bus service,” he said.

But Freeman said he disagrees vehemently that taking away lanes of traffic is necessary to create rapid-transit lines and objects to IndyGo removing 500 routes. “The point is IndyGo should budget what it’s going to cost to pay for these lines, and it should reimburse Citizens and other utilities for those lines.”

Laura O’Brien, spokeswoman for Citizens Energy Group, said during an interview that the company did not request that Freeman introduce this amendment but supports it. “We believe it’s important to balance our support for IndyGo rapid-transit lines with the potential for significant cost impacts on our customers.”

She confirmed the $7.94 million cost of relocating the lines, but she acknowledged that an agreement was not in place at the time for IndyGo to reimburse Citizens Energy. O’Brien said Citizens has not increased rates due to the Red Line relocations. “However, without reimbursement, the costs would eventually be borne by Citizens’ customers,” she said.

Qaddoura

During the debate, Sen. Fady Qaddoura, D-Indianapolis, who worked as controller and chief financial officer of Indianapolis, said the city doesn’t pay to reimburse utilities for public projects unless it’s specifically arranged in advance through a tax increment finance agreement – and it was not for the IndyGo lines.

“The city and DPW (Department of Public Works), as a rule, do not pay to reimburse utilities” he said. Likewise, the city or DPW does not get reimbursed by utilities when roads are torn up to install utilities, Qaddoura said.

If this bill passes with the IndyGo amendment, he said it will change the rules of the game under the deal that sold city utilities to Citizens Energy and the promises made to voters under the referendum.

“Our business community – the largest employers in the city – are telling you this is wrong. Then why do we go against the business community we are claiming to help,” Qaddoura said. “It will definitely harm students. It will harm schools. It will harm workers, and it will harm businesses, not only in Indianapolis but in the region.” 

Taylor said it’s important to keep IndyGo financially solvent so it can expand the rapid-transit lines.

“The Blue Line is going to help people who don’t have transportation. Just let the people ride the bus. The public has agreed to pay for it. I am getting sick and tired of you coming up with these Marion County bills because you can’t get things done in the right way, which is, go talk to the transportation corporation.”

An IndyGo representative said the transit system does not have any official statement on HB 1191 but agreed that in Marion County it’s the responsibility of utilities to bear the costs of any relocation of lines in a public right-of-way.

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8 thoughts on “IndyGo battling another potential financial hit from GOP as Legislature winds down

    1. “He no nuts, he’s crazy.” And really doing a major disservice to the citizens of Indianapolis especially the working poor. But when the billionaire owners of Indy’s sports teams (Pacers, Colts, and now Eleven) need to expand or create a PSDA to funnel additional tax dollars for their stadiums, the Legislature doesn’t blink and rubber stamps w/o any debate.

    2. Please. The entire expansion of the bus system has been a disaster. People are not riding the Red Line. The “build it and they will come” approach didn’t work. Now they want to, for the Blue line, shut down 3 of the 5 travel lanes on West Washington Street and in the process devastate local businesses.

      I agree that Aaron Freeman had no problem with sticking Indy taxpayers for the bill when considering big corporate welfare projects when he served in the council. Apparently, it took his going to the legislature to finally start standing up for taxpayers and what is in the best interest of the public. And if anyone thinks the expansion of the bus system is truly about helping the people and not big money interests, that person needs to learn something about Indy politics, i.e. that any such proposal is always about shoveling taxpayer money to well-connected developers and contractors. Always.

    3. Then he should simply just pass a bill prohibiting the bus service from expanding. Stop with the gotcha hoops that make no sense. Be flatly clear what he is after.

      Recognize, though, that a majority of Indianapolis voters agreed for increased taxes to help fund this.

    4. Paul O. They have 1/4 of the planned changes complete. I think once the redesign is completed, you will see some major improvements. Building the Redline does not make an entire public transit system. You and Freeman seem to have the same hatred and distrust. Are you white and upper middle class too?

  1. This sets a really bad precedent. By State statute, utilities are sanctioned monopolies that can use the right-of-way for free with the stipulation that they move when requested. If IndyGo suddenly has to pay for utility relocation, what’s to stop utilities from lobbying to have relocations paid for with INDOT and other local transportation projects? This would thereby increase the burden placed on taxpayers for more expensive infrastructure or by not being able to maintain as much each year.

  2. Dan M. I thought we were supposed to see major improvements with the Red Line? Given that did not happen, now the story has been updated to “They have 1/4 of the planned changes complete. ….once the redesign is completed, [THEN] you will see some major improvements”. Or, maybe we’ll just have 4x the wasted monies [but wait, we don’t care if much of it is Federal monies wasted, right?]. I wonder what would happen if the vote was held again today… I’m not sure, but it would certainly be interesting given the failure of IndyGo to deliver on the red line promises they made before the vote…

    Oh, and by the way, I liked how you had to add the race/socio economic comment to your post – not sure why you felt it relevant or appropriate, but it did highlight the underwhelming nature of your thought process, and revealed YOUR racist immaturity.

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