Tuesday, June 19, 2012

An idea whose time is never

The latest brilliant idea out of downtown Indianapolis: privatizing the City-County Building:
It's now apparent that there is no city asset that is so sacred as to not be within the grasp of Mayor Greg Ballard's political cronies to turn into a profit center. The IBJ's Kathleen McLaughlin has a story in today's edition discussing the Ballard administration's plan to privatize the City-County Building, which is currently owned by a municipal corporation, the Indianapolis-Marion County Building Authority, and leased to city-county government for $4.85 million annually, or about $7.29 per square foot, which includes unlimited utilities. The Authority floated bonds to construct the original 28-story building in 1959 for $32 million.

According to a Request for Information put out by the City, the administration thinks it would be better for it to exercise its option to assume ownership of the building at the end of its current 10-year lease with the Authority and then privatize it rather than continuing to make low lease payments to the Authority. The administration is hoping to shift cost of future repairs to the building to a third party without increasing the city's overall costs. Anyone with common sense knows that it's impossible to turn control of the building over to a private entity, expect that private entity to make necessary repairs to a 50-year old building and lease it back to the city for no more than the paltry $7.29 per square foot the City is now paying the Authority to use the space. The City is even anticipating an upfront payment from a private real estate manager as part of the deal to spend on infrastructure improvements. Apparently the City wants us to believe it is possible to have your cake and eat it too.

McLaughlin's story quotes the current chairwoman of the Authority, Abbe Hohman, as saying the Authority believes it has "offered to the city over a very long period economically attractive lease rate at the same time maintaining the building to the highest standards." The Authority also manages 19 other public facilities, including the Marion Co. Jail. Illustrative of what a great deal the city gets from its lease with the Authority is the fact that its annual lease expenses for CCB are less than half what the City is paying to lease downtown commercial space for the Marion Co. prosecutor's office and the public defender. Of course, those were sweetheart deals brokered by and for the benefit of John Bales, who has since been indicted by the federal government for corruption involving the leasing of office space for the Department of Child Services in Elkhart.
Former Mayor Stephen Goldsmith was the trailblazer in privatizing government services, on the logic that government should be run like a business. I can understand that, to a point. Tow trucks, for example. Garbage pickup. The animal shelter. The airport. I can even understand privatizing the water company, though not the way Greg Ballard did it.

But ultimately government is not a business. Unlike private business, its job is not to make a profit. Its job is to govern: protect public safety and health and provide necessary services like streets, sewers and garbage pickup. It should live within its means, to be sure, but it's not supposed to make a profit.

And this is the problem with privatization. Not everything can be outsourced. There are some things that government can do more efficiently and more fairly than the private sector. Police and fire, for instance. (If you want an example of how corrupt private fire departments can be, get a copy of Plutarch's Lives of Noble Grecians and Romans and read up on Marcus Crassus.) And now we're getting into things that even the most basic logic says cannot be outsourced.

Probably the worst example of privatization has been the jail, but the botched privatization of FSSA can't be far behind. I generally love Mitch Daniels as a governor, policy-maker and Republican (that "truce on social issues" was simple common sense), but I never understood that FSSA deal. And we're not even getting into the Ballard administration's idiotic, corrupt privatization of parking meters a while back.

Privatizing "City Hall" -- the City-County Building -- is another idiotic idea.

1 comment:

  1. It would be interesting to get a more comprehensive historical perspective on public versus private. I would contend, kind of like captialism versus socialism at this point, if either serve the citizenry by enforcing both expectations of responsibility and pursuit of corruption- fine. I no longer inherently believe in either.

    Ballard is so corrupt he deserves a chapter with Richard Daley. He saving grace from rock bottom is he doesn't seem as narcissistic as our leader who signed his book deal the day before his swearing in.