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City-County Council panel blasts justice center plan

April 15, 2015 | Indianapolis Star | Link to Article

A committee of the City-County Council on Tuesday refused to take action on a criminal justice center plan that Democrats are increasingly convinced Marion County can’t afford. But the proposal is not dead yet.
 
Behind the scenes, Republicans say, they’re working to revive the plan at Monday’s council meeting, with just a simple majority needed to call it to the floor. In essence, if supporters can whip up the votes for passage, they can salvage it even though the committee refused to send it through for consideration.
Still, the 6-2 party-line vote against sending it to the full council sent a clear message: If the proposal ultimately goes through, it will be over the objections of the bulk of the Democratic caucus.
“I think we need a different process — a more engaged process. And an outcome that doesn’t put our future mayor and council in a financial bind,” said Council Vice President John Barth.
The proposed center would replace the aging Marion County Jail, Jail II, the Arrestee Processing Center and the county’s criminal courts with one modern facility at the old GM stamping plant on Indianapolis’ Near Westside.
 
Mayor Greg Ballard has promised that the $1.75 billion proposal to design, build, operate and maintain the complex will pay for itself with new revenue and the money saved by canceling contracts and cutting staff that will no longer be needed when the county consolidates the far-flung network of criminal facilities.
 
But a report commissioned by the council found that the county could fall as much as $37.7 million short in the first nine years of the deal. If that occurred, the county would have to dip into its dwindling reserves, raise taxes or make major spending cuts in order to make its annual payments to WMB Heartland Justice Partners, the private consortium picked to manage the project.
“Not one agency will tell me that they endorse these numbers,” said Bart Brown, the council’s chief financial officer.
 
“If this is passed,” he added, “there is a high probability that the next mayor and council will have to raise revenue” to pay for the project.
Administration officials have denounced the report, which they said was flawed and politically motivated.
And — while they disagree with the council’s projections — Adam Collins, deputy mayor of economic development, said that even if a shortfall occurred in the project’s early years, “you’re still saving $250 to $300 million over the life of the project.”
 
“We have the site now, we need the jobs now, and our (jail) employees need to be safe in their jobs now,” said David Rosenberg, deputy chief of staff.
Another option?
 
Still, if there’s one thing that has united both sides in the debate, it’s the shared aversion to raising taxes to pay for it.
 
With that in mind, Brown floated a plan to finance the building using existing county option income tax dollars that now go to fund general government operations. The bonds would be backstopped by property taxes, which could be raised if income taxes ever fell short.
That’s not unheard of, but city officials say it’s a bad idea in this case. The city-county government already struggles to make ends meet; Indianapolis has dipped into its reserves to cover operational expenses four years running. In 2013, that prompted financial rating agency Standard & Poor’s to downgrade the city’s bond rating to AA.
 
“Every year, we’re spending more than we bring in,” said Chief of Staff Jason Dudich, a former city controller. “If I’m a rating agency, I’m saying ‘wait a minute, you don’t have enough revenue to cover your expenses, and now you’re pledging that revenue to debt service.’ ”
 
Brown counters that income taxes have been used successfully around the state to finance large construction projects. Plus, it’s not clear that the administration’s public-private model would have been treated any differently.
 
Moody’s Investor Service, another rating agency, issued an advisory in February that payments owed for 19 public-private partnerships around the country — including the criminal justice center — would be treated as government debt.

Uncertainty trumps need.  Leading up to Tuesday’s vote, supporters and opponents alike attempted to lobby committee members to their side.
 
The faith-based coalition IndyCAN held a rally at the City-County Building in opposition to the proposal, urging the council to build a smaller jail and invest more heavily in second-chance programs for ex-offenders. Some brought signs advocating for “jobs, not jails,” and filled the chamber with cheers whenever committee members criticized the plan.
 
Meanwhile, the Indy Chamber, led by former Ballard Deputy Mayor Michael Huber, issued a statement urging passage. Union representatives, too, spoke in favor of the proposal Tuesday night, citing the estimated 2,200 construction jobs it would create.
 
But ultimately, committee Democrats were unmoved.
 
They understand the need, they said. They just don’t buy that this is the best deal the county can get.
“I’m not convinced that this proposal is affordable,” said Councilman Joe Simpson, a Democrat. “I need to be sure, and no one has convinced me.”