Justice Center – Sheila Kennedy

Arguing Responsibly

In Sunday’s Indianapolis Star, John Guy took critics of the proposed justice center (of whom I am one) to task. His arguments boiled down to three: a new Justice Center is badly needed; it has been studied for a long time; and critics have not offered alternatives to the proposal.

None of the critics, to the best of my knowledge, have debated the need for a new facility. And it is true that moving the jail and criminal courts has been studied (or at least discussed) since the early 1990’s, although those studies have been limited in one way or another. So that leaves us with the charge–implicit, but unmistakable–that criticisms that do not offer detailed alternative proposals should be ignored.

Let me say up front that I am very sympathetic to Guy’s impatience with nay-sayers, with knee-jerk opposition to proposals advanced by government voiced by people who have no constructive suggestions to offer. That said, however, it is equally unreasonable to dismiss very specific concerns raised by a wide variety of citizens without specifically addressing or rebutting those concerns.

My own criticisms have included the lack of transparency in the planning process, and the current back-and-forth illuminates why such transparency is important: had the City-County Council and the public been included earlier in the process, rather than being presented with a “take it or leave it” package, concerns could have been aired then and–if good answers were available–rebutted. This is particularly true of the financing mechanism, which the administration acknowledges has rarely been used in this sort of project, but it also applies to issues raised by architects, city planners and real estate brokers. If the city has hard data to support its contentions that the project as envisioned will not adversely affect a downtown market that five administrations have spent 30 plus years developing, that data should be shared.

Criminal justice experts have pointed out that systemic reforms currently being discussed in Congress (for which, amazingly enough, there is bipartisan support) would likely require changes in the size and function of parts of the planned facility. An open process would allow the city and/or the successful bidder to explain whether such policy changes could be accommodated, and if so, how.

I understand impatience (indeed, I tend to share it), but when you are spending huge sums and making decisions that will have an enormous impact on the city–decisions that we will have to live with for decades to come–getting it right is more important than getting it done quickly.

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Shenanigans and the Proposed Justice Center

The Ballard Administration’s proposal to build a new Justice Center complex across the river from downtown just hasn’t smelled right for a whole host of reasons.

No one seriously doubts the need for such a facility, but critics have raised a host of legitimate concerns about this particular proposal. The excessive secrecy with which bids were solicited and evaluated raised red flags. The decision to use private financing via a lease/purchase when a public bond issue would be significantly cheaper makes no sense. The Council’s fiscal analyst has challenged the accuracy of claims that cost savings would cover lease payments without a need to raise taxes.

It isn’t just fiscal concerns, important as those are. Prior administrations have spent millions of dollars and much political capital building a robust downtown; what will happen to that downtown market if lawyers and other justice system enterprises (from bondsmen to court reporters) no longer work, shop and eat in the center city?

Architects and city planners have panned the design, and criminal justice reform groups have warned that going ahead as currently planned will foreclose needed changes to a dysfunctional system.

The Administration has ignored the critics, shrugged off the concerns and intensified pressure on the Council for a quick approval. That insistence on the need for haste has been unseemly, considering the huge amounts of money involved and the important issues raised, and Councilors on both sides of the aisle have expressed a desire to engage in a far more thorough and public review.

Unseemly, however, wasn’t the word that came to mind when I read the following in the Indiana Lawyer.

Indianapolis City-County Council Chief Financial Officer Bart Brown said councilors have told him they’ve been offered up to $50 million in projects spread among five districts if they vote to approve the proposed $1.6 billion criminal justice complex.

The Administration has dismissed these allegations as “rumor,” and I certainly have no independent evidence one way or the other. It seems highly unlikely, however, that five City-County Council members would invent such a story out of whole cloth.

As I wrote last month,

a deal this complex and expensive, intended to span this long a time-frame, needs to be done right. That means it needs to be thoroughly vetted by all stakeholders. I get suspicious when we’re given a short window within which to commit vast amounts of public money, and when the purported need for speed is based upon dark warnings that we need to move quickly in order to “lock in” benefits we aren’t even sure are there.

I get a lot more suspicious when those lobbying for speed are offering a quid pro quo.

I suspect that someone stands to make a lot of money, and I’m pretty sure it isn’t us taxpayers.

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Socializing Risk, Privatizing Profit and Evading Referenda

Let’s talk about the proposed Criminal Justice Center, shall we?

First: I think the project itself makes all kinds of sense.

Second: The way it is being planned, financed and constructed makes no sense at all–if by “making sense” we mean serving the public interest and creating a long-term public asset.

It’s the parking meter fiasco redux. The city could have upgraded the meters for a relatively reasonable sum, raised the rates as the vendor did, and retained additional millions of dollars to be used for public purposes. Instead, we enriched a private contractor and ceded control of our parking infrastructure for fifty years.

The proposed approach to the construction of the Justice Center promises to be far, far worse, because all of the incentives are perverse. The current plan (to the extent the Administration has shared any information, which it has been largely unwilling to do) has private developers designing, constructing and financing the center, then leasing it to the city.

The “virtue” of this approach is simple: the Administration has devised a clever financing mechanism that allows it to avoid the pesky requirement of a public referendum and the level of public scrutiny such a referendum would require. (Any project that would result in taxes exceeding the now-constitutional tax cap must be submitted to public vote.)

The defects of this approach are numerous.

It will cost more. Cities with excellent credit ratings (Indy’s is triple A) can borrow money at lower rates than private entities. I’m told the interest rate spread is at least 2%; on 500 million dollars, that’s a chunk of change. Furthermore, private entities must include a profit (and usually cover taxes) in the quoted price.
That need to build in a profit margin is a powerful incentive to cut corners on design and construction–decisions will be based on return on investment considerations rather than quality and/or the long-term value of what will eventually be a public asset. (As my husband says, public financing gives us buildings like the old Federal Courthouse; leasebacks give us buildings like the post office on South Street.)
Public projects of this size and scale provide lots of opportunities for crony capitalism–for spreading the goodies among one’s political donors and friends.

And there remain important unanswered questions.

For example, what happens if the City defaults, or finds future revenues insufficient to make lease payments high enough to cover those higher costs? The Administration’s estimate of available revenues includes some highly problematic “savings” it anticipates by reason of the new construction. Which City services will be sacrificed to ensure that the required payments are made? Will our already underfunded public safety budget be cut? Will even more roads go uncleared or unrepaired? Will our public parks be even more neglected?

The problem with “deals” like this one– delivered to the City Council as “take it or leave it” propositions with no meaningful opportunity to ask tough questions or consider potentially superior approaches–is that we taxpayers get stuck with decades-long liabilities agreed to in the dark by people who will be long gone when the bills come due.

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Needed: More Sunlight, Less Secrecy

I recently received an email from IndyCAN–the Indianapolis Congregation Action Network–a consortium of congregations working to build civic capacity in moderate and low-income communities. The mailing raised legitimate questions about the Justice Center project that the Administration seems to be “fast-tracking.” (I hate to be suspicious, but the goal appears to be creation of a “fait accompli” before Open Door law requests require disclosures of terms and partners, and before an election that might force a change in the “players.”)

I’ve previously posted my concerns over the contract process; IndyCAN raises other issues:

“IndyCAN members have been digging into the proposal to build a new criminal justice center and what we’re learning is troubling.

While the details have been kept secret, we believe that city officials are rushing ahead with a plan this fall that would cost as much as half a billion dollars and add 1,500 new jail beds.

This at a time when many cities are shifting away from policies that overcrowd jails with low-level nonviolent offenders and fuel racial inequality, choosing instead to invest in rehabilitation, and open up job opportunities that keep people out of prison.”

I don’t know whether these concerns are justified–and neither does anyone else, because the Ballard Administration has refused to disclose the bases upon which it made its decisions about the proposed facilities: documentation of need, size, cost, financing mechanism, method of choosing (“pre-qualifying”) bidders….all that has been kept secret, not just from the public, but also from members of the City-County Council.

An IBJ editorial in early September said it better than I can:

The city might be negotiating a sweet deal for Indianapolis taxpayers over the proposed $500 million justice center to be built across from the Indianapolis Zoo on the former site of General Motors’ stamping plant.

Or, taxpayers might be getting a bad deal.

There’s no way to know whether either is the case, because Mayor Ballard’s administration has kept secret details of its bidding process. That lack of transparency is bad government and violates the spirit of Indiana’s open-records law.

In April, the city issued a request for proposals for an all-inclusive project-management contract, in which a developer would design, build, finance, maintain and operate the new jail and courts facility. Of five companies that responded to the RFP, the city chose three finalists. Bids are due in October, and the City-County Council will likely vote on the arrangement early next year.

Ballard officials say such a package will provide a sparkling new building with improved city services—without a tax increase. They say the new contract—likely for a 35-year term—will cost the city no more than the annual $123 million it now spends to operate courts and corrections.

And they ask us to take their word for all of that. Everyone else is left to guess.

Putting terms of deals in the public realm while they’re still in the works isn’t just good government. It also can lead to better deals, as was the case in 2010 when public input led the Ballard administration to amend terms of its parking meter privatization.

The Mayor’s Office has cited no exception to state law that would explain why it has provided to justice center bidders but not to the public the maximum fee such a contract will require, why it refuses to release the RFP document, and why it won’t disclose calculations on what the project will cost taxpayers.

This is not the first, or even the second, time the Ballard administration has asked us to accept on trust that it is a wise steward of taxpayer funds. Examples include the development of the former Market Square Arena site, the Mass Ave fire station land swap, and the Broad Ripple parking garage and retail space at College Avenue and Westfield Boulevard….

Trust is not an entitlement; it is earned. Transparency and respect for the law are the surest ways for the Ballard administration to earn it.

Lack of transparency is an invitation to suspicion and cynicism. This Administration has repeatedly issued that invitation.

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Time for Ballard to Go

The City of Indianapolis is seeking bids for a massively expensive Justice Center. This huge and complex project–which makes a lot of sense, conceptually–is being headed up by a twenty-something administrator on behalf of the Ballard Administration.

The Indianapolis Business Journal requested a copy of the Request for Proposals the City issued in July. Its request was denied, and the excuse for that denial was so ridiculous that even the Pence Administration’s public access counselor has protested.

The City is claiming that the information in a Request for Proposals is confidential. Think about that.

An RFP is supposed to be publicly distributed to any and all developers or development teams that might conceivably be interested in bidding on the project. By definition, the information it contains is public, and the IBJ–not to mention members of the City-County Council who have also been kept in the dark–are entitled to see it.

Marc Lotter, the Mayor’s spokesman, responded that the RFP was released to “three qualified bidders,” and that it would not be made public until after a successful bidder has been chosen.

Why would an honest, aboveboard administration hand-pick three bidders, and proceed to share information only with those developers? Why would it keep the terms of the proposed project secret until the City is legally committed to proceed?

The whole purpose of an RFP is to cast a wide net; to encourage genuinely competitive proposals from anyone or any team qualified to perform. “Pre-selecting” those who will be permitted to respond undercuts the entire purpose of the exercise.

At best, pre-selection of a small group of developers makes it likely that responses will be less competitive and the project will be more expensive. At worst, secrecy and pre-selection are intended to ensure that the “right” people get the City’s business.

The Justice Center is estimated to cost over $500 million dollars. Quite a plum project. When that much tax money is being spent, the need for transparency–the need for public assurance that the project is being handled ethically and in a fiscally-responsible manner– is obvious.

The City says that the RFP contained “trade secrets” necessitating secrecy. As the public access counselor noted, “If an RFP sent out into the marketplace does indeed contain trade secrets, it stands to reason that the secret is out once it goes to potential contractors.”

Unless, of course, those “secrets” are only going to one’s cronies.

Up to this point, I have attributed the many ethically dubious decisions of the Ballard Administration (the 50-year lease of our parking infrastructure, the garage no one uses in Broad Ripple, etc.) to those advising our “accidental’ Mayor, who has always seemed in over his head.

Maybe I have underrated him. Maybe he really does know what he’s doing.

Either way–puppet or puppet master–he needs to go.

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