Letter to IBJ: Morality of using water and natural gas as collateral to the bond banks

Dear Editor,

By way of introduction, I am the Libertarian woman who led the property tax Indiana Tea Parties in 2007. Not only did our 2007 activism provide the catalyst necessary for the defeat of incumbent Mayor Peterson and the democrat control of city council, but most importantly our work led to a statewide local government spending decrease this year of $3.1 BILLION compared to 2009.


Indiana spending numbers are published data on Indiana Department of Local Government Finance spending reports. 
SEE: http://hoosiersforfairtaxation.blogspot.com/2010/06/2010-indiana-local-government-spending.html for reference.

We are thrilled to be on the right trajectory. Had the residents of Meridian Kessler not taken to the street in front of the Governor's Mansion on the 4th of July 2007 with literal garden pitchforks early in the crisis, Indiana and Indianapolis would not be in the good fiscal shape she is today compared to the rest of America.

In July 2007, at the beginning of our citizen activism, we did not understand the big picture that caused the property tax crisis. No one knew exactly what brought on the nightmare that made some of our residents' tax bills increase by as much as $1000 a month. Our state legislature blamed most of it on the elimination of the business inventory tax shifted over to property owners and we learned that was only part of the picture. The ugly reality of the true big picture was still hidden to us then.


Eventually that summer we came to understand the main cause of our people's property tax nightmare was the direct result of decades of the use of our property by politicians as collateral to the bond banks.

Our private property was made vulnerable to foreclosure by politicians for tax to pay for local government spending schemes such as school football stadiums, swimming pools, the downtown library debacle that tripled spending projections, and bloated salaries of far too many public school administrators who protect their political township fiefdoms above the education of Indiana's children. Our former mayor, we believe, was even bonding operating costs to run the city.

Today, the good news in Indiana is that is politically impossible to use property tax to finance wayward government spending. The bad news is that the politicians now seek new public resources to use as collateral to the bond banks and the new resource in their cross hairs is vital to our most basic human need for survival. They now target our water and natural gas as collateral to fund much needed infrastructure improvements the current city administration wants to make next year (coincidentally) when they are up for election.

Everyone is in agreement that we need to make these long over due infrastructure improvements to the city's sidewalks and sewers. Most of the proposed improvements have a guaranteed lifespan of 10 years. Yet the bonds, proposed to be held by the collateral of our water and natural gas utility rates, are for 30 years. This is not responsible borrowing.


On the plus side of the city's thinking, by doing these infrastructure projects in this economy we'll get good deals from the construction industry and decent bank rates too. However, no one from the city has engaged our top licensed independent private (not union) contractors for bids to my knowledge. They don't have a seat at the table. And perhaps that is because they have not paid a campaign donation for a private sit down at an elite downtown steak house with our mayor. I don't know for sure.


On top of it, the windfall the city will receive from the bonds is not a consistent number in their rhetoric. If you check, you will see the numbers they quote attached to this deal can vary from time to time by millions. I guess they hope we are not paying close attention.

Mayor Ballard's administration spent in the neighborhood of $9.3 million, according to the Indy Star, on studies and a PR campaign to sell this new ReBuild Indy bond banking scheme to us. Yet, no one in City Hall I have found will discuss the the morality of offering up something as vital to human survival as water as collateral to banks.

SEE: http://www.indystar.com/article/20100614/LOCAL18/6140325/Utilities-sale-s-extra-costs-bring-scrutiny

The People of Indianapolis are David against Goliath. We cannot independently raise $10 million to generate studies and a public relationship campaign to justify not bonding our water and natural gas as collateral to the banks. Yet, we all know that debt to banks is bringing America to her knees.


Common sense dictates that holding a natural resource such as water and natural gas as collateral to a bank for a debt is akin to putting one of our own children up as collateral.

The city suggests to the people, who are widely opposing this deal in the citizen blogging community, that we must offer up another solution to fix the city's sidewalks as if the sky will fall if we don't buy into this scheme. No doubt these improvements must be made.

However, are they more important than the $15 to $18 million per year they want to offer up to the Pacers? Are these infrastructure improvements more important than bailout out the Circle Centre Mall? Are these improvements more important than the millions planned to spend on yet another proposed rehab stab at the City Market? Are these improvements more important than the new buzz we're hearing to turn the former Central State Hospital into yet another sports complex?


Common sense dictates that we raise cash to make the much needed infrastructure improvements. The city has assets it can sell. I'm not sure what all of these assets are, but we have real estate that is sitting unused. Some of it is in the hands of township governments who hoard it. Perhaps uncovering these unused real estate assets sitting empty will give more reason to the argument to eliminate the fiefdoms of township government.


Perhaps instead of spending more millions on yet another rehab of the City Market, we should sell it (with lots of rules and provisions to protect its historic integrity) to savvy developers who are in the business of risk and know what to do to make that asset sizzle because it is their expertise. Maybe we should do the same with the big parking lots in the former Market Square Arena spot.


Maybe we should unload a golf course and divert parks personnel over to the worthy urban farming project this administration is working on right now...a project that holds promise to transform inner city lives by giving over land under thousands of boarded up houses for gardens and local sustainability, nutrition, and well being of our people. I can't say enough good words for the potential this project holds to transform the lives of our people and defeat the cancer that now rots our inner city.


I don't know all the answers. In part, because I don't have $10 million to spend on a study and unlimited time to devote to this matter, although it is on my heart day and night. What I do know is that is immoral to attach our city's water and natural gas to bonds our children and grandchildren rate payers for infrastructure improvements in an election year.

Before we go to the bond bank, let's assess our "cash in the attic" and all the real estate we can let go to liquidation for cash. And let's make sure our priorities are balanced by secure water and energy resources will be affordable long into the future to even our poorest residents. 


Sincerely,
Melyssa