Auditor: Mayor’s office attempted to wire $6 million to BlueIndy

(WISH Photo)

INDIANAPOLIS (WISH) — Mayor Greg Ballard’s administration attempted to wire $6 million late last week into an escrow account set up for BlueIndy, the company running the city’s new electric car-sharing program.

The move has reignited a firestorm of criticism among some city leaders who claim the Ballard administration “side-stepped” state law and is using public funds to finance a private company’s venture that is still in its infancy in Indianapolis.

“I don’t know if the legal term would be ‘skirted’, but they certainly did not follow the law to the letter,” Marion County Auditor Julie Voorhies said during an interview with I-Team 8.

After learning that Ballard’s office requested the money be transferred, Voorhies wrote a letter Friday to Regions Bank asking that the transfer “not be deposited.”

The letter, dated Sep. 11, states:

I am writing to confirm that I cannot authorize the wire transfer and to request that the funds be immediately wired back to the originating financial institution. (State law) requires that monies paid from the city treasury may only be undertaken upon a warrant drawn by the Auditor of Marion County.”

It went on to state that “the wire transfer was initiated by the city on its own accord, without any approval by me or my staff.”

Voorhies and Bart Brown, the chief financial officer for the council, both contend that Mayor Ballard’s administration did not have the authority to request the wire transfer.

They claim only there was no appropriation from the council and that Voorhies is the only person who can sign off on the wire transfer.

Despite repeated requests for an interview, Mayor Ballard’s spokeswoman Jen Pittman said he was unavailable.

But in emails to I-Team 8, Pittman disputed the claims made by Voorhees and Brown, saying:

The transfer was done without the knowledge of the council, because the council plays no role in the process of transferring funds. The money was appropriated to DPW by the council during the previous budget cycle, and the payment to BlueIndy was authorized by the DPW Board, which includes council appointees. It seems as if the Auditor’s office may be taking its cue from a handful of councilors who announced their intention to find a way to block BlueIndy funding, simply because they don’t like the program…”

The Department of Public Works board did approve the $6 million at its meeting late last month, but Brown contends the board’s vote was invalid because the city’s contract with BlueIndy is invalid.

According to Brown, the contract was not competitively bid. Ballard’s office admitted this during that same board hearing last month, publicly stating that it was bid through Indianapolis Power and Light, which has invested $3.7 million in the car-sharing program.

According to testimony during that meeting, the $6 million is intended to help BlueIndy make infrastructure improvements that will help guide the installation of more charging sites for its electric cars.

Herve Muller, the president of BlueIndy, confirmed that during a lengthy interview with I-Team 8 Tuesday. We spoke to him via Skype from his office in Atlanta.

“In terms of the funding from the beginning of our discussions with the city there was a need to have participation in some of the infrastructure cost to allow the charging stations to be deployed,” Muller said. “It’s actually a three-party agreement that is in place between BlueIndy, the city and IPL who is also a party.”

When asked directly about the wire transfer request and the criticism that surrounds it, Muller said:

“In terms of the process you just described I do not have information on that specifically. We have a contract with the city and we have full confidence and full trust in the city in meeting all of its obligations under the contract,” he said.

During the interview, Muller spoke about his excitement for the program. He says since it launched in early September, BlueIndy now has nearly 500 subscribers. He also said the company is committed to Indianapolis “for the long term” and he has a desire to put rest concerns made by members of city council, who have criticized how the deal was reached.

“As you appreciate, we are investing a lot of money in Indianapolis and we would not do it without a solid contractual obligation,” Muller said.

The contract, reviewed by I-Team 8, provides BlueIndy with exclusive rights to run the city’s electric car-sharing service. The company is also under a deadline to build 50 charging sites by the end of the year or face paying a $1 million fine to IPL. The city inked a 15-year deal with BlueIndy that does include a requirement that BlueIndy will receive $6 million into an escrow account on or about Sep. 1, 2015. The contract also includes profit-sharing for both the city and IPL. But Muller said that the company isn’t expecting to break even until at least year three.

“That goal is not to reach profitability immediately and make money hand over fist,” Muller said.

Muller also disputed what he called “a notion” that BlueIndy executives have not been forthcoming with city leaders, especially those on council.

“We will continue to engage…we are determined that everyone in Indianapolis sees the value of what we bring,” he said.

Councillor Zach Adamson, who says he supports the idea of the car-sharing “in essence,” has been critical of the contract inked with the city, which he calls “invalid and illegal.” He wants BlueIndy to sign a franchise agreement. Muller said Tuesday that the company is open to signing an amendment to its contract and wants council input on future sites for charging stations.

When asked about the wire transfer request, Adamson said: “It’s indicative of this entire process. It’s been done under the cover of darkness and in smoke-filled rooms outside the public process.”

Late Monday night – with Adamson’s encouragement – the council passed a non-binding resolution to tow BlueIndy cars. The resolution has no teeth, Bart Brown acknowledged, but likely won’t help the negotiation talks between BlueIndy and the council.

Muller said he was “suprised” by the vote Monday and thought the two sides had been making progress.

“At this point in time, that is where we stand. We are awaiting from them a proposal essentially. As you (can) appreciate, we cannot sign an agreement without knowing what is going to be in an agreement,” said Muller.

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