CIB improves financial situation with more cuts

The Indianapolis Capital Improvement Board’s dire financial situation might be improving enough that it may forego the first installment of a $27 million state loan.

State legislators this summer authorized the CIB to receive $27 million—$9 million in annual loans the state will provide for three years—to help close the CIB’s budget shortfall.

The CIB, which manages the city’s professional sports facilities and the Indiana Convention Center, has struggled much of the year to close a projected $47 million deficit for 2010.

But CIB Treasurer Ann Lathrop said at its Tuesday meeting the group may not need the $9 million in 2009, which would save the CIB from paying interest charges of 5.25 percent.

The CIB will decide at its December meeting whether to accept the loan. Even if it turns down the first installment, it still could choose to accept the remaining funds earmarked for 2010 and 2011.

CIB President Bob Grand cautioned that although the group’s finances are much improved, more work remains. 

“We do know we’re healthier than we were a year ago,” he said. “But the point of the matter is, this is an ongoing issue.”

The group reduced spending by closing on a substitute credit facility, to retire $25.4 million of a debt service reserve.

It also has cut several positions and reduced salaries on others. The CIB has eliminated 11 full-time salaried positions—nine on Friday and two today. Lathrop declined to disclose what positions were cut.

CIB executives accepted permanent salary reductions of 5 percent to 20 percent, and union contracts for convention center workers were negotiated with no salary increases and changes to overtime policies.

Also, the CIB through August spent $650,000 on improvements to its properties, when it typically spends $3 million in annual upgrades.

The CIB anticipates spending $50 million of its $63 million budget in 2010, which could leave it with a cash balance of $36 million.