A rock for Mayor Ballard to look under

We are grateful for the person behind Indy Tax Dollars who wrote this analysis after reading the city's Comprehensive Annual Financial Report.


Quick questions - Part II
December 31, 2007

Here are two more items from the city's Comprehensive Annual Financial Report (Dec. 2005) which we recommend to the attention of the new mayor's transition team.

First, under the general heading of "Notes to Financial Statements" on page 49, the following paragraph appears as a footnote to "Section A. Lessee Arrangements."
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"The City entered into an agreement with the Marion County Convention and Recreational Facility Authority (MCCRFA) to lease a portion of land located at the airport over a 25-year term expiring in 2016. This land was being used for a major aircraft maintenance and overhaul center for United Airlines, Inc. ("United") prior to United's bankruptcy filing in 2003. The lease requires the City to make annual payments equal to the MCCRFA's debt service requirements." (Our emphasis.)
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We presume the dollar amount required of the city is specified at some other point in the pages and pages of numbers making up this full report. More important, it seems to us, is the question as to why a "Convention and Recreational Facility Authority" owns land involved in the UAL fiasco at the airport. We pointed out a few days ago that this agency was created to provide certain financing for projects of the CIB. Governmental bodies linkage designed to obscure who owes how much and to what purpose?
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Second, with the same general heading, but under "Section C. Other Financing Transactions," we find this wording on page 50.
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"Circle Centre Mall "
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In January 1994, the City entered into a long-term operating lease with Circle Centre Development Company, an Indiana general partnership. The lease extends through December 2027 and provides for seven options to extend the term for 10 years. No rental payments are due under the lease." (Our emphasis.)
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We plead ignorance here. The land under the mall is owned principally by the city and is therefore not on the assessment rolls at all. The improvements are the responsibility of the owners/tenants and are supposed to be taxable. Since the land is not taxable, it is our understanding that the city was to receive revenue in lieu of taxes through leases of the land.
If this is the case, then one tends to be curious about what is being leased and why a lease would be required where no payments are to be made. Most importantly, does the lease affect city revenues?
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Once again, we're just pointing to some of the rocks that the new mayor might want to turn over as he attempts to determine exactly what he has gotten himself into.