Update: 2017 not yet over. Muncie changing EMS ordinance to clear the way to use the revenue for more than EMS. Read the article!
Muncie local government is so out of control. With the debt rising, investigations, lawsuits, public hearings, arrest one just can’t seem to catch their breath.
Bracken vs. City of Muncie public hearing was held on 11-29-17 in Noblesville, Indiana. Mayor Tyler taking the stand and under oath not recalling details of events. Yes, it is all about Madjax.
Todd Donati was called to testify and now people are looking at the State’s audit reports of the Muncie Redevelopment Commission (MRC) for 2014 and 2015. It will curl your hair when you read it. The scary part is Muncie’s debt including principal, interest is nearly $74 million.
Michael Hicks testified and put into question the City’s economic development efforts. City Councilman Dan Ridenour testified the information he received in the lawsuit differed from the information he received at the time the bond was approved.
Moving on. A few months ago Mayor Tyler wanted the city to have it’s own EMS. Currently, we have a county EMS. Then he changed his mind no EMS. Now he is actively working on a city-run EMS. This will be a disaster. And it’s self-serving not for the good of the community. City or County. Muncie was fortunate to receive federal funding for the Muncie Fire Department. When Tyler took office in 2012 there was $8 million from the previous mayor to fund the MFD. But, when the grant was not renewed, Mayor Tyler had no money so he passed a 43% income tax in 14 days. Well, that didn’t draw enough money, so he wants to have a city-run EMS to keep the 16 firemen employed.
Let’s just briefly (if that’s possible) review 2017.
- Building Commissioner Craig Nichols arrested and charged with 34 felonies.
- Damaging financial audits of the city.
- FBI investigation.
- Chief of Police resigns and files a lawsuit against the city.
- Prairie Creek reservoir substantially over budget.
- Muncie Fire Department facing layoff
- City acquires private property claims it was to keep the neighbourhood from deteriorating. Mayor and two council members live in this neighbourhood.
- The city takes over the financial records of Muncie Redevelopment after the audits. City controller resigns.
- Mayor Tyler and Todd Donati claim they weren’t on the board of Sustainable Muncie when the city decided to financial support with tax dollars. (Bracken’s lawsuit said they were.)
- Councilperson Nora Powell resigns from Sustainable Muncie’s board when Councilperson Linda Gregory said it may be a conflict of interest. The city attorney concurred.
- Tom Bracken sues the City of Muncie, Muncie Redevelopment and Muncie City Council. Courts will rule in January.
- The city of Muncie attempts to require Tom Bracken to put up a $4.5 million bond citing his lawsuit could hinder Sustainable Muncie (a/k/a MadJax) ability to get leases.
- City refuses to release attorney fees related to the FBI investigation. Issued public statement by city spokesperson Sarah Beach.
- Mayor Tyler said the city has always been transparent and Beach’s statement was not accurate. (Note: the fees still haven’t been made public.)
- Founding members of Sustainable Muncie (a/k/a MadJax) resign citing the direction has changed.
- Rumored the FBI is taking some interest in Sustainable Muncie. Has not been confirmed. (Update: Michael Hicks testimony 11-29-17 hearing.)
- Delaware County has given the city over 200 properties and none have been put back on the tax rolls. Delaware County stopped the practice.
There was a whole lot of shaking going on prior to good old 2017. That’s for another time. Look for a rundown on the SBOA audits and more…
Mayor Tyler and the City of Muncie is in the news again. This time it’s over the city’s refusal to release attorney fees. Freedom of Information request was denied. City’s spokesperson, Sarah Beach, on behalf of the city, claimed it was “privileged” information. The state’s public access counsellor disagreed.
Four days later after the letter was released in the paper, and not without public criticism, Mayor Tyler held a one-minute press conference. That’s all the time needed to discredit the letter. The city’s feeble attempt at damage control. Again.
You know the letter Beach submitted to the newspaper was approved by both the city attorney and Mayor Tyler. Now Dennis Tyler is saying it was inaccurate.
Tyler said Friday that the city “has always and will always be transparent to its citizens.”
So, let’s look at the transparent government.
In 2012 the City’s building commissioner re-opened his business and immediately received city contracts. It wasn’t until Walls & Ceilings was fined by OSHA the public became aware. (It was rumoured Nichols was doing work.)
The city’s Neighborhood Investment Committee (NIC) program birthed in 2015. For this program, the city buys and sells properties to revitalize neighbourhoods. Some of you may remember East Central Reinvestment Corporation (ECRC) funded with federal dollars.
East Central Reinvestment Corp., a pioneering local CHDO founded in 1986, went under after defaulting on mortgage payments on 13 houses in 2008. ECRC spent more than $3 million to improve more than 80 properties before HUD cut off funding to it in 2006 after an investigation of conflicts of interest and other complaints. Muncie to prop up housing rehabbers with HUD 4-1-2011
What’s happening with the NIC program?
Last week we learned Delaware County gave the city 215 properties and not one has been put back on the tax rolls. Where is the transparency? Does anyone know the status of these properties? Nope.
Or the status of the Village? Or the transparency of the Muncie Redevelopment Commission? Did we know city money was filtering into the building commissioner’s wallet? Did we know Mayor Tyler was preparing to pass a 43% income tax? The press conference on Nichols’ arrest, was Mayor Tyler transparent?
Or that Tyler and Donati were board members of Sustainable Muncie? (Both said they resigned and Beach went on to say Tyler’s involvement was as a “figurehead” only). Of course. At the final hour, Tyler said there would be a job training program. Transparency.
The night he won a second term, he declared to followers “I will never lie to you.” Cheers. Every time the city gets caught they blamed it on someone else. The increased tax levy in ’12. McShurley’s fault. Traffic lights not synced, blight program delayed, no paving grant? The State’s fault.
Do you ever wonder why the former MRC president resigned right after Donati lost the election? Perfect timing. Or how about bid specifications written specifically for the companies the city favours? The building on Walnut, Wilson School, VAT. Was the Mayor transparent or distressed when MSD purchased the building for $300,000 based on an inflated appraisal? Did Mayor Tyler or Todd Donati give any indication the city was buying the Rutter Building? Or how much rental revenue? Do we know?
Woe to those who increase their wealth on the backs of the people they were elected to serve. The readers may not agree with this statement, but they are to be pitied. Lacking integrity, greedy, and they will not enjoy the fruits of their labour. It’s tainted fruit. It has soured in their bellies. But then again, if one is void of honesty, integrity, empathy and virtue they will think they are the victims of unjust circumstances.
Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman. The most important political office is that of the private citizen. Louis Brandeis
Sometimes the best way to see the future is to dig up the past.
Larry Riley predicted the outcome of Gearbox now Madjax. His column appeared in the local paper on January 30, 2016. One community member claimed Riley was biased in this column, although Riley did provide compelling arguments.
the organization has no revenue stream, no signed tenants, no record of accomplishment Source: Gearbox vs Greenspace Muncie Star Press 1-30-16
Sustainable Muncie hasn’t been around as an organization long enough yet to file its first required annual financial report, having been organized only in December of 2014. Source: Gearbox vs Greenspace Muncie Star Press 1-30-16
Another minus to Gearbox is the cost: $1 million, now guaranteed by the city (if Sustainable Muncie can’t make existing or future loan payments this year, then the city’s money kicks in, but the organization is to pay back the city by the end of this year … how?) Source: Gearbox vs Greenspace Muncie Star Press 1-30-16
So involved was Mayor Dennis Tyler no other ideas could be considered. In fact, he was silent about another proposal, Tom Bracken’s greenspace. Which makes one wonder why he dismissed other ideas and put Gearbox to the feasibility test. Or Bracken’s proposal for that matter. Mayor Tyler brought only one idea to the public.
And that’s the end of that.
Let’s look at what has transpired since Riley’s column. At the time, City council passed an ordinance backing $1 million to be paid back by the end of 2016.
Tyler told The Star Press he wanted to loan $1 million in EDIT revenue to the group rather than just give it to Sustainable Muncie to create an obligation to be repaid. The loan is supposed to be repaid by the end of 2016.
We know for a fact the money was not paid back.
“The city has not issued any money as it related to this line of credit,” officials replied through city human resources director Sarah Beach last week. Donati, who is also a Sustainable Muncie board member, told TheStar Press that the board was “trying to decide what direction we want to go with” the funding for Madjax, including the original $1 million line of credit. “Eventually, something will have to be done with it. … It’s totally Sustainable Muncie’s responsibility to pay that back and they’re looking at how to get that done.” Source: Star Press June 6, 2017
Two months after this article appeared in the paper, the citizens of Muncie were looking at a $4.5 million dollar bond. The bond was passed with the promise of no property taxes and a training program. But, in June, Donati and Tyler were already considering bonding for this project, we just didn’t know about it.
Interesting to note: The City Council had little financial information in 2016 and just a smidgeon more in 2017 yet, they still voted a big fat YES in both instances.
- January 2016 Muncie City Council voted to loan Gearbox $1 million with no financial information
- December 2016 Loan not paid
- June 2017 Donati said it was Sustainable Muncie’s responsibility to pay back the money
- August 2017 Notice for public hearing on $4.5 million bond published
- August 2017 Muncie City Council learned of Sustainable Muncie’s debt
- August 2017 Donati said $200,000 has been set aside by Muncie Redevelopment Commission & others for $348,000 annual bond debt repayment (Muncie Redevelopment Commission & others)
- August 2017 Muncie City Council voted to introduce the ordinance
- September 2017 Public Hearing for Madjax – Sustainable Muncie
- September 2017 Muncie City Council voted to approve the bond
Madjax was not able to pay the interest-free loan in 2016 or make any payments in 2017. Muncie Redevelopment has set aside $200,000 to guarantee the 2018 bond payment.
This is the transparent government of Mayor Dennis Tyler. But I digress…
You may be interested in looking at the City of Muncie’s total debt as of 9-29-17. For your reading pleasure see links below on the TIF obligations. As you can see, TIF revenues (property tax dollars) hold a large share of the debt repayment.
Recently Muncie City Council added $4.5 million in debt and Mayor Dennis Tyler is wanting to bond another $3.5 million for Muncie Community Schools. $8 million additional debt in less than one month. Chew on it, baby.
The sad part is the TIF revenue is real property tax dollars. The reason why TIF districts are so popular amongst government units is simple. The money collected in the districts can be spent any which way. Even a $4.5 million bond claiming it is for training purposes for a cash-strapped start-up company. One in which the mayor and his appointed president of the Redevelopment Commission (MRC) sit on the board. Go figure.
That’s all, folks! See y’all soon.
Three quotes from the newspaper best explain the public’s complaint against the Muncie Redevelopment Commission and the City of Muncie’s request for $4.5 million dollars in financial support of Madjax.
“These much-needed revenues, which should be used for essential city services, will be diverted to subsidize this project that is not for the public utility and benefit.” Tom Bracken (remonstrance)
Gregory said this week that the project was “a non-profit that has too little history to make it viable for the 23 years of the bond’s life.”
Ridenour said that Tyler is “within his scope” to use EDIT funds for the building. “The project has some merit but I would prefer to see it occur over time so that it is self-supporting.” Remonstrance, question Muncie Star Press 9-8-17
Indeed, our tax dollars should go to provide essential city services. The city is at the highest tax levy we have ever seen. Mayor Tyler and Muncie City Council passed LOIT and increased EDIT tax in 2015 at the highest percentages. Currently, the city is paying attorney fees and we have no idea of the financial cost. Yet, according to a previous article, Madjax will use a portion of this bond to pay off their debt liabilities.
According to a previous article, Madjax will use a portion of the bond to pay off their debt liabilities. Should Madjax fail to have enough revenue, then city tax dollars will pick up the shortage. Certainly, this is not a financially sound move for the city tax payers.
Nora Powell resigned from the board because it is a conflict of interest. Last we heard, Todd Donati sits on the board of Sustainable Muncie and is the Economic Development Director. Would this not be a conflict of interest?
A remonstrance has been filed
Nora Powell Muncie City Council resigned from Madjax board citing conflict of interest
Linda Gregory Muncie City Council cited lack of requested information
Madjax assets $2.4 million (includes building at $2.4 million)
Madjax debt $1.7 million
Revenue for 2017 $168,817
In 2016 the City of Muncie earmarked a loan for $1 million for what then was known as Gearbox. Tyler told The Star Press he wanted to loan $1 million in EDIT revenue to the group rather than just give it to Sustainable Muncie to create an obligation to be repaid. The loan is supposed to be repaid by the end of 2016. City council split on Gearbox loan
When Madjax first came on the scene it sounded pretty cool. This was before board members resigned, and the city offered to support with tax dollars.
Just a reminder, the City of Muncie passed an increase in taxes EDIT and LOIT in 2015, effective January 1, 2016.
Stop gambling with our money.
Muncie City Council Meeting
Muncie City Hall
Monday September 11th
Todd Donati – Muncie Redevelopment Commission, President
When: Thursday 9-7-17
Time: 4:00 PM
Where: City Hall Mayor’s Conference Room
A public hearing on $4.5 million dollar bond for Madjax. The repayment is from leases and should they fall short? You guessed it….tax dollars will make the payment.
The bond money will help to pay off some of the $1.762 million in debt Madjax owes. Seems similar to a consolidation loan where you borrow money to pay off your debts and have one payment. You still owe, though.
In this case, if Madjax pays off their debt, but fails to make the bond issuance payment, the taxpayers will pick up the slack.
Since when did the Muncie Redevelopment Commission become a bank? We’re talking about $4.5 million dollar loan. Surely, if MRC has that kind of dough to throw around perhaps MRC should instead loosen up their purse strings and return $4.5 million back to the taxing entities.
Mayor Tyler claims he wants to help the schools, how about restructuring TIF districts? Instead, we’ll take even more money for the cash-cow call TIF districts.
Most everyone liked the idea of a Maker’s Place until we found out the city is dishing out money right and left. You have to wonder about the adverse reaction Bracken’s proposal created. There’s some money to be had or someone is going to benefit. Won’t be the taxpayers, guaranteed.
Some time has passed since council members showed some reluctance on this bond. Let’s see how they vote after their private meetings. Afterall, going against Mayor Tyler and his appointed friend Todd Donati might cost them Democrat Headquarters support come next election.