CIB’s 2011 budget slated to grow by $10 million

The Capital Improvement Board’s 2011 operating budget is projected to increase by $10 million over this year's
budget—the same amount the organization initially will provide to the Indiana Pacers under a new funding agreement reached
last month.

But CIB President Ann Lathrop insists funding for the Pacers to help operate Conseco Fieldhouse, which totals $30 million
over the next three years, is not the only reason for the larger, $73.1 million operating budget.

Instead, she pointed to $3.5 million in other improvements to the Fieldhouse, which is operated by the CIB, as well as $1.5
million earmarked for renovations and repairs to other buildings it owns.

An additional $1 million in utility costs to heat and cool the 254,000-square-foot expansion of the Indiana Convention Center,
set to open in January, also is a factor, Lathrop said.

“It’s easy to point to the Pacers,” she said, “but the reality is, it’s a little more complicated
than that.”

CIB members are set to vote on the proposed budget at their 3 p.m. meeting on Monday. The City-County Council needs to give
final approval.

The CIB’s decision in July to give the Pacers $30 million drew a sharp rebuke from opponents
who criticized the funding as another example of a handout to a professional sports team and its wealthy owner.

Pacers owner Herb Simon bought brother Mel Simon’s share of the team shortly before Mel died in September 2009. The
Simons founded retail real estate goliath Simon Property Group Inc.

The CIB expects to balance its larger budget next year with a combination of cuts and anticipated increases in revenue from
hospitality and food and beverage taxes.

Personnel costs should decline by $3 million, for instance, with the bulk of it coming from a decrease in salaries and wages
due to job cuts undertaken last year.

Lathrop anticipates the amount of funds the CIB will collect from hospitality and food and beverage taxes next year to rise
by 3 percent and 6 percent, respectively.

The CIB is banking on the larger convention center attracting more meetings next year, which would translate into increased
visitor spending on food and hotels.

Also helping matters is a $9 million loan—one of three installments that would total $27 million—the CIB took
from the state this year. The CIB is budgeting another $9 million in 2011.  

Lathrop acknowledged that the budget will be tight, saying, “we will probably end up spending everything we have.”

The CIB is the public agency that manages several downtown facilities, including Conseco Fieldhouse, the convention center,
Lucas Oil Stadium and Victory Field.

Higher-than-expected costs to operate Lucas Oil Stadium have helped put the CIB in a financial bind. The 2011 operating budget
allocates $3.5 million, the same amount as this year, to the Indianapolis Colts for a share of revenue from stadium events.
Another $1.6 million—$100,000 more than this year—will be given to the team to reimburse it for game-day expenses.

Other highlights of the 2011 budget include $300,000 in funding for the Arts Council of Indianapolis, which formerly received
as much as $1 million annually, and $300,000 to support local tourism efforts. Most of that funding was cut or reduced in
the current budget as the CIB grappled with its budget woes.

In addition, the Indianapolis Convention & Visitors Association is slated to receive $8 million from the CIB next year.
Unlike previous years, that the money will not come from CIB revenue but from downtown-development funds. The CIB typically
funds about 70 percent of the ICVA’s budget.

Including debt obligations, the CIB’s total budget for 2011 is expected to be $104.4 million.