Voice For Liberty

Category: Wichita city government

  • Financial state of the cities

    Financial state of the cities

    Wichitans carry a “Taxpayer Burden” of $1,200 per taxpayer, which is not as bad as many cities.

    Truth in Accounting is an organization that works to improve the reliability and transparency of governmental financial information. 1 Annually, it produces a report titled Financial State of the Cities that examines the fiscal health of cities. The report does not take into account economic factors like economic growth, but instead compares a city’s assets with the bills it has accumulated.

    Most cities, Wichita included, have a shortfall. The primary reasons for a shortfall are unfunded pension liabilities and unfunded post-employment benefits, called OPEB. TIA explains: “When cities do not have enough money to pay their bills, TIA takes the money needed to pay bills and divides it by the estimated number of city taxpayers. We call the resulting number a Taxpayer Burden and rank cities based on this measure.” 2 The report released this month is based on comprehensive annual financial reports (CAFR) for fiscal year 2018.

    In the net, Wichita has a taxpayer burden of $1,200 per person, meaning “If retirement benefits or other costs are not reduced, then taxpayers could have to pay $1,200 in future taxes without receiving any related services or benefits. According to TIA, “Wichita’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years. Of the $1.5 billion in retirement benefits promised, the city has not funded $257.4 million in pension and $34.9 million in retiree health care benefits.”

    Wichita ranks eighteenth among the nation’s 75 largest cities (the rank of one is best.) Wichita earned a grade of “C” along with 27 other cities.

    In the previous year, Wichita ranked tenth, having a surplus of $800 per taxpayer.

    By the way, the Government Financial Officers Association (GFOA) standard is for cities to publish their CAFRs 180 days after the end of the fiscal year. TIA says it is ideal for cities to publish within 100 days. Wichita published in 179 days.

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    Notes

    1. “The nonpartisan mission of TIA is to educate and empower citizens with understandable, reliable, and transparent government financial information. TIA is a 501(c)(3) nonprofit, nonpartisan organization composed of business, community, and academic leaders interested in improving government financial reporting.” See https://www.truthinaccounting.org/about/page/faqs-2. ↩
    2. Financial State of the Cities. Available at https://www.truthinaccounting.org/library/doclib/Financial-State-of-the-Cities-2020.pdf. ↩
  • Century II resource center

    Century II resource center

    Updated and refreshed: A resource of information about the Century II Performing Arts and Convention Center in Wichita. Click here: wichitaliberty.org/century-ii-resource-center-wichita

    Painting of Century II by Bill Goffrier. For more of his works, visit Goffrier Studio on the web or Bill Goffrier Studio on Facebook.

  • Renderings, at least believable

    Renderings, at least believable

    How believable are architectural renderings of a Ferris wheel and swimming pool in Wichita?

    Over the past year, Wichitans have been presented with architectural renderings of proposed projects. These life-like artistic representations are intended to generate support from clients, be they elected officials, bureaucrats, or voters.

    But there’s been a problem. Across the country, some renderings are so vivid, but at the same time totally false, that a term was coined: vaportecture.

    We understand that most of these renderings are conceptual. They aren’t meant to have the binding intent of a contract.


    But when a feature is so vivid and specific, like a Ferris wheel or in-river swimming pool, people notice and remember these things. Citizens may believe these features are something that is promised to them in exchange for their support.

    Click for larger.
    I think people understand that these renderings are conceptual, especially for a project in the beginning stages of planning. But that wasn’t the case for the Ferris wheel by the new ballpark. That rendering was presented to Wichitans as the project was being debated for final approval. It is plausible, after all, that there could be a Ferris wheel on the riverbank. That’s why showing the attraction when it was not in the plan is deceptive.

    On the in-river swimming pool, the Wichita Eagle reported, “Architects behind the vision say it’s meant to get people thinking, talking and dreaming — not reaching for their haz-mat swimsuits.”

    Okay, I guess.

    Paraphrasing Neil deMause, the author of the vaportecture article, perhaps the intent of these renderings is misdirection. If we’re caught up in the idea of a Ferris wheel or debating the merits of an in-river swimming pool, attention is diverted from the important details of the project.

    This feeling of misdirection is especially significant in Wichita. In less than one year, city hall rolled out a ballpark plan with important details concealed until the last moment, and the city awarded a large water plant contract under a cloud of ethical misconduct. Wichita civic leaders need to earn the trust of citizens, and fantastical — and false — renderings like these don’t help.

  • Wichita to consider tax forgiveness outside policy parameters

    Wichita to consider tax forgiveness outside policy parameters

    The Wichita city council will consider a tax giveaway for an economic development project that does not meet its stated policy.

    Tomorrow the Wichita City Council will consider issuing up to $33 million in Industrial Revenue Bonds in relation to a project at the Wichita State University Innovation Campus.

    Despite its name, in the IRB program the city does not purchase bonds or lend money. The city does not guarantee the payment of the bond interest or principle. Instead, the IRB program allows the city to grant tax forgiveness, both property tax and sales tax. 1 City documents explain: “MWCB is also requesting a sales tax exemption on items purchased for the project and a 100% five-year tax exemption on the IRB-financed real property improvements plus a second five-year exemption subject to City Council approval.” 2 (emphasis added)

    How much tax is being forgiven? For property tax, $773,604 annually for up to ten years, again from city documents:

    Based on the latest available mill levy, and assuming that the real property improvements are valued at 80% of the actual capital investment, the estimated value of the property tax abatement for the first full year is approximately $773,604. The value of a 100% real property tax exemption as applicable to the taxing jurisdictions is:

    City $215,767
    State $9,900
    County $193,927
    USD 259 (Wichita Public School District) $354,010

    City documents don’t estimate the amount of sales tax savings, but if all the bond proceeds were spent on taxable items, the savings would be $2,475,000.

    This project fails to meet standards set by the city and county for payback from economic development incentives. According to the city’s economic development pages, “City benefit/cost ration must be at least 1.3 to 1.” 3 This requirement is repeated in the Sedgwick County/City of Wichita Economic Development Policy: “The ratio of public benefits to public costs, each on a present value basis, should not be less than 1.3 to one for both the general and debt service funds for the City of Wichita; for Sedgwick County should not be less than 1.3 overall.” 4

    The benefit-cost ratios supplied for this project don’t meet the city and county standards, again from city documents:

    A benefit/cost analysis was performed by Wichita State University’s Center for Economic Development and Business Research based upon the proposed Letter of Intent, with the following ratio of benefits to costs:

    City of Wichita 1.18 to 1.00
    City General Fund 1.10 to 1.00
    City Debt Service 1.37 to 1.00
    Sedgwick County 1.11 to 1.00
    USD 259 1.34 to 1.00
    State of Kansas 5.08 to 1.00

    While the 1.3 to one threshold is met for the city’s debt service fund, it is not met for the city as a whole. Additionally, it doesn’t meet the 1.3 to one threshold for Sedgwick County. The Sedgwick County/City of Wichita Economic Development Policy specifies mitigating factors that can be used to bypass the 1.3 to one requirement, but city documents do not mention these.

    Pieter Brueghel the Younger. The tax-collector’s office.

    —
    Notes

  • Can Wichita learn from a setback?

    Can Wichita learn from a setback?

    What can Wichita learn from the news of layoffs at Spirit and Textron?

    While the Wichita metropolitan area is facing immediate stress due to layoffs at two large employers, we need to look at the long-term horizon and evaluate whether our economic development strategy needs adjustments.

    Like many areas, Wichita relies on economic development incentives to lure companies, or to persuade them to stay rather than leave for elsewhere. There is much research finding incentives playing a minor part in business decisions. Nathan M. Jensen, for example, found this:

    In my own study of 80 incentive offerings in Texas, published in October in the journal Public Choice, I found that numerous companies applied for incentives after they had already broken ground and, in some cases, after they had completed building. A few even noted in their applications that they weren’t looking at other states for their investments. Yet all of these companies received taxpayer dollars for doing what they would have done anyway.

    This points to the open secret of economic development: Though incentives are rarely effective in changing firms’ investment decisions, they do allow politicians to attend ribbon-cutting ceremonies where they can highlight their own role in attracting a new company (or retaining an old one) and creating jobs. 1

    Timothy J. Bartik found this: “Reviewing 34 estimates from research studies of incentives’ effects, Bartik found that typical incentives only tip 2 to 25 percent of location decisions — that is, the company wouldn’t have located there ‘but for’ the incentive.” 2

    So how can we know if incentives are needed in a particular instance? It’s difficult, as neither party has an incentive to be forthright. If a business executive does not ask for incentives, the firm’s owners are justified in asking why not. And it’s difficult for politicians and bureaucrats to turn down opportunities to bask in the glory of groundbreaking and ribbon-cutting ceremonies and their improved chances at re-election.

    Incentives increase the cost of government for those who don’t receive them. Yes, cities like Wichita promote a benefit-cost analysis that shows that for each dollar spent or forgone for incentives, the city receives even more. But this happens with all economic activity, even that which is not incentivized. This leads to the important question: Is the incentive necessary? With so much evidence showing incentives are not necessary, Wichita spends a lot on companies that don’t need incentives, with everyone else paying their cost.

    Even before the Spirit announcement, Wichita was looking at a slowly-growing economy. The Center for Economic Development and Business Research at Wichita State University provides forecasts for the Wichita economy. For 2020, CEDBR wrote in its October forecast, “For 2020, growth is expected to be more modest, as the Wichita economy is projected to add approximately 1,600 new jobs and grow 0.5 percent.” 3 For comparison, total nonfarm employment rose by 2,800 jobs (0.9 percent) from November 2018 to November 2019. For the same period, employment in the nation grew by 1.5 percent. CEDBR forecast a slowing of the growth of the Wichita economy, and that was well before the announcements of layoffs at Texron and Spirit.

    What to do?

    A Wichita Eagle editorial suggests diversifying the local economy. That’s been a goal for decades. But it hasn’t happened. 4

    The Eagle also advises “swift, decisive action,” taking “economic development off the back burner, where it’s languished for years.” This is surprising, as organizations like Greater Wichita Partnership are devoted to the task of economic development. GWP tells us, “Fast-forwarding economic growth is at the heart of the Greater Wichita Partnership’s mission. 5 The cost of employing its two top executives topped $485,000 in 2018. It also paid $115,000 to share an executive with another agency. 6 If the Eagle thinks this is practicing economic development at a slow simmer, we need to make a few big changes.

    The Eagle also calls for “generous funding streams.” This may be a reference to the common perception that Wichita has few economic development incentives available. But we have about the same as everyone else: Forgiveness of property and sales taxes, tax increment funding, refunds of employee state withholding taxes, sales tax districts, investment tax credits, historic tax credits, loans, parking easements, grants, and regulatory relief. The city says it no longer uses cash incentives, which is not true.

    The Eagle notes some bright spots, mentioning specifically, “Cargill’s decision to stay in Wichita.” But that was a decision to stay, and it came at great cost to the city.

    We need to say no to incentives for large firms.

    There’s plenty of evidence that young business firms are the key to economic growth. 7 But Wichita’s economic development policies, as evidenced by the lavishing of subsidy on Spirit and Cargill, are definitely stacked against the entrepreneur.

    These subsidies and practices are harmful to the Wichita economy, creating a strangling effect on entrepreneurship and young companies. As large subsidized companies escape paying taxes, others have to pay. This increases the burden of the cost of government on everyone else — in particular on the companies we need to nurture.

    Instead, Wichita relies on targeted investment in our future. Our elected officials and bureaucrats believe they have the ability to select which companies are worthy of public investment, and which are not. It’s a form of centralized planning by government that shapes the future direction of the Wichita economy. It hasn’t been working.

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    Notes

    1. *The Amazon HQ2 Fiasco Was No Outlier.* Available at https://www.wsj.com/articles/the-amazon-hq2-fiasco-was-no-outlier-11544800749. ↩
    2. Upjohn Institute. Available at https://www.upjohn.org/research-highlights/how-effective-are-local-economic-development-incentives. ↩
    3. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. October 3, 2019. Available at https://www.cedbr.org/content/2019/eoc/2020-wichita-forecast.pdf. ↩
    4. Weeks, Bob. Wichita aerospace manufacturing concentration. Available at https://wichitaliberty.org/economics/wichita-aerospace-manufacturing-concentration/. ↩
    5. https://greaterwichitapartnership.org/about_us/about_us. ↩
    6. IRS form 990 for 2018. ↩
    7. Jason Wiens and Chris Jackson. *The Importance of Young Firms for Economic Growth. * Available at https://www.kauffman.org/what-we-do/resources/entrepreneurship-policy-digest/the-importance-of-young-firms-for-economic-growth. ↩
  • Business improvement district on tap in Wichita

    Business improvement district on tap in Wichita

    The Douglas Design District seeks to transform from a voluntary business organization to a tax-funded branch of government.

    Tomorrow the Wichita City Council will consider forming a business improvement district (BID) in east-central Wichita. Previously, city documents offered some explanation regarding the district: 1

    First, there already exists a voluntary organization: “The Douglas Design District (DDD) is a voluntary organization of over 300 local businesses located near Douglas Avenue between Washington Avenue and Oliver Avenue. In 2017, the DDD established a five-year strategic plan to become a financially self-sustaining organization that is not reliant on elective membership.”

    The purpose of a business improvement district: “A BID provides for the administration and financing of additional and extended services to businesses within the district and is funded by the City levying a mandatory service fee on the businesses within the district.”

    Who will collect, and who will spend? “While the City levies the service fee, it can contract with a third-party organization such as the DDD to operate the BID. The approach is similar to that used by the City to contract with the Wichita Downtown Development Corporation in downtown.”

    All this is repeated in the agenda packet for this week’s meeting. 2

    The action on the agenda this week finalizes the district’s funding mechanism: “The annual fee ranges from $100 to $550 depending on the size of the business and is anticipated to generate approximately $50,000 a year.” By size, the city means the number of square feet. If a business or property owner does not pay, the city may start collection activity, although what that means is unspecified: “If any delinquent Fee or penalty is not paid within sixty (60) days from the date on which the Fee or penalty became delinquent, the City may give notice to the business of its intention to initiate a collection action.”

    Are BIDs a good idea? Most information about them is provided by their boosters, that is, those who directly benefit from the service fee, which is really a tax. But there are some doubters. The New Republic, by no means a conservative publication, printed a piece arguing against BIDs, stating: “But too often BIDs have turned against the businesses they were meant to serve, making the cost of entry into a new area even higher for local merchants, or lacking the transparency needed to instill trust from the community.” 3

    A larger and more balanced look at BIDs comes from Washington Monthly in 2018:

    The privatized structure of BIDs may raise liberals’ hackles, but it’s clear that BIDs can be a useful tool to remake neighborhoods into places where people actually want to spend their time. Many big-city mayors — who are overwhelmingly Democratic — have thrown their weight behind them. D.C. Mayor Muriel Bowser recently doled out grants totaling $300,000 to five neighborhoods thinking about forming their own BIDs. (One of the grantees, Dupont Circle, with the decaying park, will start collecting taxes from business owners in the fall.)

    Still, there are real downsides to BIDs for renters and small business owners, who will not benefit from rising property values and may ultimately be pushed out of the area. Luckily, this isn’t a hugely difficult problem to remedy. The best, and easiest, way to revamp how BIDs are run is through city halls; they’re the ones who legislate what BIDs can and can’t do, while holding them accountable to the public. But too often, they renege on that responsibility. 4

    From Canada, harsh criticism:

    In this paper, we propose and develop the concept of “socio-economic hygiene” to denote the ways in which neoliberal Western urban space is spatially regulated and re-oriented towards consumption in a way that reinforces social exclusion. … We conclude by tracking how sociological strategies of “hygiene” have moved from racial and biological features to features of place and socioeconomic status, and how BIDs, resembling genocidal states in certain ways, use these strategies to continually justify their own existence. 5

    Civil society, or government?

    What should trouble everyone is the replacement of civil society with political society. Edward H. Crane explains: “There are basically only two ways to organize society: Coercively, through government mandates, or voluntarily, through the private interaction of individuals and associations. … In a civil society, you make the choices about your life. In a political society, someone else makes those choices.”

    Right now DDD is a voluntary organization. Civil society, in other words. But now it is proposed to replace it with political society.

    Why trade voluntary cooperation for the force of government? The annual report of the DDD (included in the city council agenda packet in 2018) explains: “Approximately 1/3 of businesses in DDD’s project area are DDD members yet ALL businesses benefit from DDD’s efforts. A BID eliminates this ‘free rider’ problem and, if implemented, would allow DDD to have a singular focus on implementing the BID business plan rather than always chasing membership.” For emphasis, the report notes: “THE PAYMENT OF THE BID ASSESSMENT WILL REPLACE MEMBERSHIP DUES.”

    Another term for chasing membership is selling your product by showing how it creates value. If the formation of the BID is successful, the Douglas Design District will be relieved of this necessity. Will having a guaranteed source of revenue make DDD more or less responsive to its members?

    Also, the DDD annual report states: “A BID assessment is not a tax.” But for those who decide to skip paying this tax? After a few years, they will experience the blunt power of government tax collection.

    Taxation without transparency

    The agenda packet states this about the relationship between the city and the district: “While the City levies the service fee, it can contract with a third-party organization such as the DDD to operate the BID.”

    Wichita has similar organizations. One is the Wichita Downtown Development Corporation, now known as Downtown Wichita. This organization is funded nearly entirely by tax revenue from an improvement district. Yet, it refuses to make its spending records public, and the city supports that decision. 6

    Another similar taxpayer-funded organization is the city’s convention and tourism bureau, which has gone by several names over the years. Regarding it, in 2012 I wrote:

    We’ve learned that city council members rely on — as Randy Brown told the council last year — facile legal reasoning to avoid oversight: “It may not be the obligation of the City of Wichita to enforce the Kansas Open Records Act legally, but certainly morally you guys have that obligation. To keep something cloudy when it should be transparent I think is foolishness on the part of any public body, and a slap in the face of the citizens of Kansas. By every definition that we’ve discovered, organizations such as Go Wichita are subject to the Kansas Open Records Act.” 7

    Of interest is a segment from the KAKE Television public affairs program “This Week in Kansas” where the failure of the Wichita City Council, especially council member Pete Meitzner (district 2, east Wichita), to recognize the value of open records and open government is discussed. Video is here.

    Since this time, the city has formed a business improvement district known as a TBID. It covers all hotels in the city and imposes an additional 2.75 percent tax to hotel bills, although the city and hotels call it a “City Tourism Fee.” 8 I’ve not asked for records of this spending, but I am sure the request would be rejected.

    Will the Douglas Design District follow the standard set by Wichita’s other improvement districts and evade accountability and transparency?

    Results from current improvement districts

    The Washington Monthly piece mentions that city halls can hold BIDs accountable. But lack of transparency works against oversight and accountability.

    Then, if anyone wonders what about the results of Wichita’s improvement districts, here are a few findings:

    • For the past decade business activity in downtown Wichita has been on a downhill trend. The data for 2017 (the most recent year for data) holds good news, with business activity rising. It isn’t the vibrant growth we’ve been told is happening in downtown Wichita, but at least things are not getting worse. 9
    • Truthfulness is in short supply. The Downtown Wichita organization has been caught in either a huge lie or gross incompetence regarding its claim of the number of people working in downtown Wichita. After brought to its attention, the number is no longer used. 10
    • Wichita economic development officials use a circuitous method of estimating the population of downtown Wichita, producing a number much higher than Census Bureau estimates. 11
    • Looking at hotel guest tax receipts, which are a surrogate for total hotel room revenue, we observe that of the largest markets in Kansas, Wichita has experienced nearly the least growth in hotel guest tax collections since 2010. 12

    Despite this record, Wichita City Hall seems satisfied with these results.

    —
    Notes

    1. City of Wichita. Agenda for August 21, 2018, Item IV-1. Available at http://www.wichita.gov/Council/Agendas/08-21-2018%20City%20Council%20Agenda%20Packet.pdf. ↩
    2. City of Wichita. Agenda for January 14, 2020, Item V-4. Available at https://wichita.gov/Council/Agendas/01-14-2020%20Agenda%20Packet.pdf. ↩
    3. Max Rivlin-Nadler. Business Improvement Districts Ruin Neighborhoods. The New Republic, February 19, 2016. Available at https://newrepublic.com/article/130188/business-improvement-districts-ruin-neighborhoods. ↩
    4. Saahil Desai. One Landlord, One Vote. Available at https://washingtonmonthly.com/magazine/july-august-2018/one-landlord-one-vote/. ↩
    5. Sanscartier, Matthew D.; Gacek, James. Out, Damned Spot: Socio-economic Hygienic Practices of Business Improvement Districts. Canadian Journal of Urban Research. Winter 2016, Vol. 25 Issue 2, p73-85. ↩
    6. Weeks, Bob. Wichita’s open records policy is contrary to the interests of citizens. Available at https://wichitaliberty.org/wichita-government/wichita-open-records-policy-contrary-interests-citizens/. ↩
    7. Weeks, Bob. Wichita, again, fails at open government. Available at https://wichitaliberty.org/open-records/wichita-again-fails-at-open-government/. ↩
    8. Weeks, Bob. Wichita seeks to add more tax to hotel bills. Available at https://wichitaliberty.org/wichita-government/wichita-seeks-add-tax-hotel-bills/. ↩
    9. Weeks, Bob. Downtown Wichita jobs rise Available at https://wichitaliberty.org/economics/downtown-wichita-jobs-rise/. ↩
    10. Weeks, Bob. Downtown Wichita jobs, sort of. Available at https://wichitaliberty.org/wichita-government/downtown-wichita-jobs/. ↩
    11. Weeks, Bob. Downtown Wichita population is up Available at https://wichitaliberty.org/wichita-government/downtown-wichita-population-is-up-2018/. ↩
    12. Weeks, Bob. Updated: Kansas hotel guest tax collections Available at https://wichitaliberty.org/economics/updated-kansas-hotel-guest-tax-collections/. ↩
  • It may become more expensive in Wichita

    It may become more expensive in Wichita

    The City of Wichita plans to create a large district where extra sales tax will be charged.

    At next Tuesday’s Wichita City Council meeting, the council will consider imposing additional taxes in downtown Wichita and Delano. The new tax district includes the new baseball park and large amounts of surrounding land, some of the land in Waterwalk east of the Arkansas River, and land as far north as First and Waco.

    The new tax is known as a Community Improvement District, or CID. In these districts, merchants charge additional sales tax which is used to benefit the owners of property in the district. In this case, the city is proposing to add two cents per dollar to the existing 7.5 percent sales tax.

    City documents give this for the use of the funds: “CID revenue will be used for the design and construction of the stadium utilities, parking, and other improvements related to the stadium, river corridor improvements and surrounding development on the west bank, within the district.”

    Of note, the city proposes to pass the ordinance on emergency first reading.

    Following, a map of the CID. Click for a larger version.

  • Downtown Wichita population is up

    Downtown Wichita population is up

    New Census Bureau data shows the population growing in downtown Wichita.

    Data released today by the United States Census Bureau shows the estimated population for zip code 67202 in 2018 was 1,671, an increase of 73 from the prior year.

    Zip code 67202 is greater downtown Wichita, from the Arkansas River east to Washington, and Kellogg north to Central, roughly.

    The source of this data is U.S. Census Bureau, 2014-2018 American Community Survey 5-Year Estimates. This means the data is not the Bureau’s estimate of the population in 2018. For areas of population less than 65,000, the Bureau does not provide one-year estimates. Instead, the five-year estimates use data gathered over a longer time period in order to provide greater accuracy. The 90 percent confidence interval for the 2018 estimate is plus or minus 214 persons.

    The Bureau cautions that the five-year estimates should not be used as the population of the year in the midpoint of the five-year period: “Therefore, ACS estimates based on data collected from 2011–2015 should not be labeled ‘2013,’ even though that is the midpoint of the 5-year period.” (See below for more about these data.)

    Further, the Bureau issues this advice: “However, in areas experiencing major changes over a given time period, the multiyear estimates may be quite different from the single-year estimates for any of the individual years.” Downtown Wichita, I believe, qualifies as an area “experiencing major changes.” The five-year estimates must be considered in light of this advice.

    Still, as shown in the nearby table and charts, the ACS numbers are far below the population reported by the downtown Wichita development agency Downtown Wichita. See my article Downtown Wichita population for more about this topic.

    Following, excerpts from the Census Bureau publication Understanding and Using American Community Survey Data: What All Data Users Need to Know.

    Understanding Period Estimates
    Single-year and multiyear estimates from the ACS are all “period” estimates derived from a sample collected over a period of time, as opposed to “point-in-time” estimates such as those from past decennial censuses. For example, the 2000 Census “long form” sampled the resident U.S. population as of April 1, 2000.

    While an ACS 1-year estimate includes information collected over a 12-month period, an ACS 5-year estimateincludes data collected over a 60-month period.

    In the case of ACS 1-year estimates, the period is the calendar year (e.g., the 2015 ACS covers the period from January 2015 through December 2015). In the case of ACS multiyear estimates, the period is 5 calendar years (e.g., the 2011–2015 ACS estimates cover the period from January 2011 through December 2015). Therefore, ACS estimates based on data collected from 2011–2015 should not be labeled “2013,” even though that is the midpoint of the 5-year period.

    Multiyear estimates should be labeled to indicate clearly the full period of time (e.g., “The child poverty rate in 2011–2015 was X percent.”). They do not describe any specific day, month, or year within that time period.

    Multiyear estimates require some considerations that single-year estimates do not. For example, multiyear estimates released in consecutive years consist mostly of overlapping years and shared data.

    The primary advantage of using multiyear estimates is the increased statistical reliability of the data compared with that of single-year estimates, particularly for small geographic areas and small population subgroups. Figure 3.2 shows the improved precision of an ACS 5-year estimate, compared with a 1-year estimate, for child poverty statistics in Rice County, Minnesota—a county with about 65,000 residents in 2015. The lines above and below the point estimates represent the confidence intervals, or ranges of uncertainty, around each estimate. The confidence interval for the 1-year child poverty estimate ranges from 1.4 percent to 9.4 percent (8 percentage points) while the interval for the 5-year estimate is narrower, ranging from 12.8 percent to 19.2 percent (6 percentage points). (Refer to the section on “Understanding Error and Determining Statistical Significance” for a detailed explanation of uncertainty in ACS data.)

    Deciding Which ACS Estimate to Use
    For data users interested in obtaining detailed ACS data for small geographic areas (areas with fewer than 65,000 residents), ACS 5-year estimates are the only option.

    The 5-year estimates for an area have larger samples and smaller margins of error than the 1-year estimates. However, they are less current because the larger samples include data that were collected in earlier years. The main advantage of using multiyear estimates is the increased statistical reliability for smaller geographic areas and small population groups.

    However, in areas experiencing major changes over a given time period, the multiyear estimates may be quite different from the single-year estimates for any of the individual years. The single year and multiyear estimates will not be the same because they are based on data from two different time periods.

  • Wichita water plant contract

    Wichita water plant contract

    Wichita should consider discarding the water plant contract in order to salvage its reputation and respect for process.

    This week the Wichita City Council will consider approving a contract with Wichita Water Partners to build a new water treatment plant. It’s a controversial matter that likely played a significant role in the recent mayoral election. Wichita Eagle reporting by Chance Swaim in the story Wichita’s mayor steered multi-million-dollar water plant contract to friends traces through the issues.

    The most important thing is that the city receives a reliable water plant that meets its needs. Currently, the city operates a plant that is the only source of water. It’s described as having outlived its useful life. At any moment over the next several years, the city might have to spend millions to repair a plant it will retire soon.

    It’s also important that the city does not reward the corruption — petty or not — surrounding the awarding of this contract. Mayor Longwell was defeated in his bid for reelection, and that sends a message. But the other corrupt party is being rewarded, as it seems likely the city council will approve the contract with Wichita Water Partners. Its principals sought to influence the mayor by wining and dining. (Literally, they offered to deliver leftover wine to the mayor.) They flattered the mayor with honorifics like Mayor Miracle, Your Eminence, His Highness, Homecoming Queen, Eye Candy, Jethro, and Wine Delivery Guy.

    Besides this, Wichita Water Partners was not honest with the city. The Wichita Eagle reported this: “Rod Young, president of the engineering firm PEC, and Roger McClellan, president of the construction company Wildcat, both acknowledged to The Eagle their relationships with the mayor. They did not disclose those relationships to the city on a form asking about potential conflicts of interest in the water project.” (emphasis added) PEC and Wildcat are part of Wichita Water Partners.

    But the coddling of Longwell worked. After paying the mayor’s $1,000 fee to enter a charity golf tournament, Longwell told them, “I’m going to be super nice to you for a long time.” Longwell switched the basis of awarding the contract, proposing a “design competition.” But only one firm entered the competition, Wichita Water Partners. Jacobs, one of the largest engineering firms, was originally and unanimously preferred by the city’s selection committee. But the company decided not to enter the design competition. The result was only one company participating in the mayor’s “contest.”

    There are important considerations going forward, especially as the city considers spending one billion dollars or more on new projects like a convention center, performing arts center, and other downtown projects:

    • The selection committee had significant concerns regarding Wichita Water Partners and its proposal. Since the city overrode the committee’s strong recommendation, will the recommendation of other similar committees be taken seriously? Will other committees feel their job is important? What about citizen advisory boards?

    • One of the nation’s largest and most respected engineering firms declined to participate in the mayor’s “design contest.” Will the city be able to attract bids from other reputable firms given the way the water plant contract process was changed? Will future bidders fear that the city’s bid process will be changed just before the contract is awarded, after bidders have spent time and money preparing their bids?

    • While Mayor Longwell will be leaving office soon, other city officials who enabled the process — elected and others — are still in place.

    This is not the way to do business, even though the government is not a business. As the Wichita Eagle editorialized: “Longwell steered the council away from its earlier decision on how to award the water plant contract — away from competitive bidding and toward shadier ways of doing business — and that is unacceptable.”

    While Longwell was defeated in an election, the other party to the “shadier ways of doing business” won. That’s bad for the city right now, and bad for the city looking forward.

    Should the city discard the Wichita Water Partners contract this week, as is its right? Undoubtedly, starting the bid process again would add cost and cause further delay. And, given the city’s conduct, would a new bid process attract quality proposals?

    Canceling the contract and starting over is worth deliberation and consideration. Our city’s reputation and respect for process are more important than any single contract, even its largest.