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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe Indiana Office of Management & Budget yesterday released details of two studies used to arrive at the $13 million it said could be saved by combining the Capital Improvement Board and the Marion County Building Authority into one organization.
State officials initially had declined to make the studies available to the public. Indiana Gov. Mitch Daniels and Indianapolis Mayor Greg Ballard on June 4 announced a plan to rescue the financially distressed Capital Improvement Board.
One analysis done by Bob Goad, a managing partner of New York-based Highbridge Capital Management, estimated the combination could save $10.9 million by making cuts in compensation, benefits, advertising and utility costs, among others. The CIB already has trimmed $10 million from its budget in an effort to pare down an expected $47 million deficit next year.
The other study, performed by Pennsylvania-based SMG, a facilities management firm, compared the costs related to operating Lucas Oil Stadium and the Indiana Convention Center to what Houston spends to operate its football stadium and convention center. SMG concluded that Indianapolis spends $12.8 million more than Houston, including $7.2 million more in personnel costs.
The CIB manages the football stadium and the convention center, as well as Conseco Fieldhouse and Victory Field.
Indiana lawmakers tomorrow will begin convening for a special session to craft a state budget. They also are expected to debate the proposal to raise funds to cover the CIB’s shortfall.
At a monthly CIB meeting on Monday, board President Bob Grand said members already “have cut into the bone” but acknowledged that it’s possible to lop more from the budget.
“All I can do on this board is to cut, and we’ll continue to cut,” he said. “But I don’t have pride of authorship that I’m the only one who can make cuts.”
The plan introduced by Daniels and Ballard proposes that the CIB and Marion County Building Authority merge into a new entity, called the Facilities Management Board of Marion County, which the governor and mayor say would save $13 million in operating costs.
In addition, the county would generate an estimated $12 million annually by raising the hotel tax from 9 percent to 10 percent, admissions tax from 6 percent to 10 percent and the rental car tax from 4 percent to 6 percent.
Also, $8 million would be raised annually by expanding the Professional Sports Development Area to include the new J.W. Marriott hotel complex. The $250 million development is under construction near White River State Park.
Counting the $10 million the CIB already has shaved from its budget, and a $4 million credit backup from the city, $47 million could be achieved in reductions and new revenue sources, the governor and mayor said.
A public-policy expert said he applauds the two for proposing a solution and hopes the plan is well-received by the General Assembly.
“There needs to be a solution,” said John L. Krauss, director of Indiana University’s Public Policy Institute at IUPUI. “It’s the only workable solution that’s on the table now.”
The Indianapolis Convention & Visitors Association receives funding from the CIB and is eager to see its situation resolved, ICVA President Don Welsh said. The association is requesting $3 million to $5 million in additional funding from the CIB to increase its marketing efforts.
“Hopefully, we’ve made a good, compelling argument to justify the investment,” he said.
The CIB is facing a shortfall largely due to the additional $20 million required annually to operate Lucas Oil Stadium, which is much larger than the previous home of the Colts, the RCA Dome.
The CIB also expects to absorb $15 million next year in Conseco Fieldhouse operating costs that the Indiana Pacers say they can no longer afford.
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