Mon June 4, 2012
Council Questions City CFO About Budget Deals With PARC
Hearing testimony from Chief Financial Officer Steve Rowland, the Louisville Metro Council's Budget Committee began its review of the mayor's proposed spending plan on Monday.
Mayor Greg Fischer's latest budget balances the city's books without raising taxes, cutting city services or furloughing Metro employee. However, council members spent most of the time grilling the administration about the budget's reliance on the sale of two downtown garages to the parking authority.
The city is selling two downtown parking lots to the Parking Authority of River City for $10.7 million and selling two garages for $3.9 million. PARC technically purchased the garages from the former county government at merger nine years ago, but the payment was never received.
Budget Committee Vice Chairman Kelly Downard, R-16, says the mayor's agreement is unacceptable because PARC owes much more money for the garages after Metro Government paid bonds on the structures since merger.
"They’ve been taking income off this—net income—for seven to nine years, that’s our money. We’ve been paying the bonds down, good lord," he says. "I think PARC’s got a problem because they have been taking our money on a garage they didn’t pay for, on debt that we’ve been paying and I think there’s a serious problem here."
In 2004, PARC approved the purchase and took control of the structures but the transaction was never recorded. The $3.9 million being offered by Fischer is an assessed value of the garages—located on Market Street and near Louisville Gardens—that does not include interest.
Rowland says PARC’s executive director brought the oversight to the city’s attention and their current leadership was forthcoming with the information and their board is open to discussing the deal.
"PARC never took title," Rowland told the budget panel. "Those garages are still on our books as an asset and not on their books. The agreement was just never effectuated."
Several city lawmakers criticized the plan and told the administration taxpayers need more answers. Others asked if the city plans to have the garages appraised and how the oversight was made. The administration hasn't gotten a new appraisal for either garage and rather is trying to implement the agreement from eight years ago, according to Rowland.
"In light of what I'm hearing today I'm almost inclined to say I want to see minutes, I want to see an open records request back til 2003. It's really distressing," says Councilwoman Cheri Bryant Hamilton, D-5. "It just came to your attention in April, but how long have they known about it and not done anything about it?"
Economist Paul Coomes also testified before the budget committee and told city lawmakers Louisville is coming out of the recession. According to the University of Louisville professor, occupational taxes and net profits have increased by 4 percent each.
The mayor's spending plan for the upcoming fiscal year depends largely on increased tax revenue.
"Despite what the press has been saying we've actually been in recovery and expansion for a couple of years," he says. "It looks like we're coming out of this one a little stronger than a year ago and we're up by 610,000 jobs."
Coomes says certain sectors were hit by the recession harder than others, such as manufacturing and construction job. The recovery, however, hasn't been as strong in years past.