Tag: Cronyism

Wichita Mayor Carl Brewer delivered the annual State of the City address. He said a few things that deserve discussion.

This week Wichita Mayor Carl Brewer delivered his annual State of the City address. We expect a certain amount of bragging and over-the-top community pride, things like “Wichita is the BEST place to work and raise a family!” That’s good, to a point. Because if we take these boasts seriously, and if they are not based on factual information, then we have a problem. We may believe that everything is fine in Wichita. But if the actual state of the city is otherwise, we may take unwise action that ultimately is harmful.

(While the city took prominent measures to promote the mayor’s speech, so far the text has not been made available on the city’s website. But you may click here to read it.)

Here’s an example, and perhaps the most important. The mayor said “Our community partnerships have helped us overcome the challenges of the great recession — which brought layoffs to many sectors of our economy.” But the problem is that we haven’t overcome the recession.

If we take a look at job growth in Wichita over the last two decades, we see Wichita performing very poorly. That’s not only on an absolute basis, but relative to our self-chosen peer cities. The relative part is important, because the recession was nation-wide. All cities suffered. Note that there are a few cities over which Wichita ranked higher: Springfield, Illinois, and Wichita Falls, Texas. These cities are relevant because we recently hired people from these cities to lead our economic development efforts.

I’ve shown data like this to the city council. I don’t think they believed me. I can understand their reluctance, as it’s not easy to admit things like this. Few like to admit failure. But that doesn’t excuse a reluctance to face facts. I also believe that some council members think that city hall critics take joy in presenting these figures. At least for me, that’s not true. I realize that these statistics tell a story of human hardship. So for those who don’t believe or trust my research, here’s a chart prepared by the Wichita Metro Chamber of Commerce for a presentation to its leadership committee. It uses a different time frame and a slightly different set of peers for comparison, but the results are the same: Wichita lags behind in terms of job growth.

Despite this evidence, the mayor thinks we’re doing well, and he is proud of our economic development efforts. In his address, he told the audience this: “For the past five years — the Greater Wichita Economic Development Coalition has helped generate nearly 10,000 jobs and more than 400 million in capital investment.”

That sounds like a lot of jobs. But we have to temper that number. We know that we don’t update our job statistics to reflect jobs that didn’t last for very long. We also must realize that some of these jobs would have been created without the involvement of our economic development agencies. We also must realize that these economic development efforts have a cost, and that cost is harmful to our economy and job creation.

But even if we give our economic development agencies sole credit for these 10,000 jobs, let’s apply a little arithmetic to provide some context. The Bureau of Labor Statistics tells us that the labor force in the Wichita Metropolitan area is about 302,000 people. that number, by the way, has been declining since 2009. If we take the 10,000 jobs — recognizing that was for five years — that averages to 2,000 jobs per year. That’s in the neighborhood of six percent of the labor force.

Does that represent a significant factor in the Wichita area economy? Remember, that calculation gives government more credit that it deserves. When we combine this with Wichita’s lackluster performance in creating jobs compared to our peers, I really don’t think we should be proud of our government’s economic development efforts.

In his State of the City Address, Wichita Mayor Carl Brewer also said we need to “continue to diversify our economy.” But we’re not doing that. Our economic development programs heavily favor the aviation industry, which makes it more difficult for aspiring companies in other diverse industries to start and thrive.

The mayor told the audience that “We will also continue to support our successful affordable airfares program.” This is the program whereby Wichita and the state of Kansas pay a discount airline to provide service in Wichita. It was AirTran, but is now Southwest. It is thought that if one airline has low fares, others will reduce their fares to match. That’s probably the case. But I’ve done the research, and there is another effect. As can be seen in the nearby chart, the number of flights and the number of available seats is declining in Wichita. These measures are also declining on a national level, but they are declining faster in Wichita than for the nation.

The mayor also asked for cooperation in using Southwest Airlines, advising the audience: “So when you make your corporate travel plans, please remember our community’s commitment to supporting low-cost carriers.” Well. How would you feel if you worked for one of our air carriers that don’t receive a subsidy, such as American, United, and Delta? How would you feel if you owned stock in one of these airlines, as does nearly everyone who holds broad-based index funds in their retirement or investment accounts?

In the past, the subsidized discount carrier has carried around ten percent of Wichita’s passengers. So we are vitally dependent on the legacy, or major, airlines, and we don’t need to insult them, as I believe the mayor did.

(To help you explore Wichita airport data, I’ve created an interactive visualization. Click here to open the visualization in a new window. You may add or remove any number of airports. Or, if you’d like to watch a video, click on Wichita Airport statistics: The video.)

Water was another topic that the mayor touched on. He told the audience: “The city has also invested in the second phase of the aquifer storage and recovery project known as ASR. New construction was completed in time to help with the drought. More than 100 million gallons were diverted from the little Arkansas River directly to customers.” 100 million gallons sounds like a lot of water. But what is the context? Well, 100 million gallons is about how much water we use on a single hot summer day.

And what about the ASR, or aquifer storage and recovery program? Its cost, so far for Phases I and II, is $247 million. Two more phases are contemplated. Despite this investment, and despite the plan’s boasts, Wichitans were threatened with huge fines for excessive water usage. The Wichita City Council also started a rebate program so that citizens were forced to pay for other people to buy low-water usage appliances. Expensive city decorative fountains were dry for a time.

Why were these measures necessary? A document created in March 2013 — that’s just as Wichita realized the city was running out of water — is titled “Wichita Area Future Water Supply: A Model Program for Other Municipalities.” It states: “In 1993 the Wichita City Council adopted an Integrated Local Water Supply Plan that identified cost effective water resources that would be adequate to meet Wichita’s water supply needs through the year 2050.” This squares with what former mayor Bob Knight recently told the Wichita Pachyderm Club, that when he was in office, Wichita had sufficient water for the next 50 years. He was told that about 10 years ago.

Just to give you an idea of how seriously we should take the claims made in speeches like this, here’s what the mayor told us in his 2009 State of the City Address: “We will continue work on the state-of-the art water supply system, known as the ASR project. It will provide the Wichita area with sufficient water for the next 50 years. Economic Development is not possible without an adequate water supply.” The mayor’s right. We need an adequate water supply. But it appears that despite huge expense and the boasts of city officials — including the mayor — we don’t have a secure water supply.

The mayor also addressed transit. He asked the community to answer a few questions, such as:

Should we have more stops to drop off and pick up riders?
Should we run later hours during the week and on the weekends?
Should we find new partners to extend our service area and help with costs?

The problem with questions like these are that citizens don’t have all the information needed to make an informed answer. Would we like to have more bus service? Who could answer no to such a question?

But if the mayor had told us that the cost per passenger mile for Wichita transit buses is 95 cents, or that only 30 percent of the operating costs are paid by fares, people might answer these questions differently. (That 30 percent would be lower if we included the cost of capital, that is, the cost of the buses.) And when the mayor asked citizens to weigh in at the Activate Wichita website: I looked, and there’s no topic for transit.

But even if citizens were informed of these costs, their answers are still not fully reliable. That’s because of the disconnect between the payment for the service and the actual bus service. Because so much of the cost of providing bus service is paid for someone else, we don’t really see the total cost of a bus trip. That’s often a problem with services provided by the government. Since someone else is paying, there’s not the same concern for receiving value as there is when people spend their own money.

The Activate Wichita website, by the way. When citizens are asked to rate ideas, to express their approval or — well, that’s the problem. Your choices for voting on an idea are: “I Love It!” … “I Like It!” … “It’s OK.” … “Neutral.” That’s it. There’s no voting option for expressing disagreement or disapproval with an idea. “Neutral” is as much dissent as Wichitans are allowed to express in this system. On this system that city leaders say they rely on for gathering citizen input, there needs to be a voting selection that expresses disagreement or disapproval with an idea. Otherwise when votes are tallied, the worst that any idea can be is “neutral.” City planners may get a false impression that all these ideas a fine and dandy.

On the topic of citizen involvement: The mayor also told us this: “A few weeks ago – the city launched the Office of Community Engagement.” That’s something that the city needs, based on data the city has gathered. The Wichita Performance Measures Report holds some data from a survey called the National Research Center National Citizen Survey. Survey respondents were asked to rate “the job Wichita does at welcoming citizen involvement.” The results are shown in the nearby chart I created from data in the most recent version of the Wichita Performance Measure Report. The numbers are the percent of respondents giving “excellent” or “good” as their response to the question. The values for the last three administrations of the survey are between 35 percent and 39 percent. The report says this performance is “much below” a benchmark set by the National Research Center. The report tells us that the city expects to re-survey citizens in 2014. For that year, the city has given itself the lofty target of 40 percent of citizens rating the job Wichita does at welcoming citizen involvement as excellent or good. Maybe an Office of Community Engagement will help.

Last year the city conducted an extensive survey of residents. Of this survey, the mayor said: “We learned that more than 70% of our residents are willing to rise above their personal interests to do what’s best for the community.”

The problem with this is that it relies on the false concept of a conflict between personal interests and what is good for the community. In the marketplace, which is the opposite of government, people advance their self-interest in one legitimate way: By finding out the goods and services that others want, and then providing them. If you can do this well and efficiently, you can earn profits. It’s the quest for profits — that’s self interest — that drives people to figure out what others want, and then to work hard to provide that. Everyone benefits.

This quest for profits could, and should, apply to areas that are under the control of government. But people are so afraid that someone will earn a profit by serving their fellow man. Recently John Stossel spotlighted a park in New York City that is run by a private corporation with the aim of earning a profit. People are happy with the new park. They feel safe, even though the park doesn’t discriminate and still lets homeless people stay there. There’s commerce going on, selling food, for example. People like that, and evidence of that is the profit being earned. But Stossel’s guest was critical and unhappy because someone was earning a profit, even though park patrons were happy with the park and most were unaware of its private sector operation.

So when the park was operated by the city — for the common good, that is — not many people used it. It was dirty and trashy, and people didn’t feel safe. Under the profit motive, people like the park and they use it. So where is the conflict between personal interest and what is good for the community?

Now, not everything government does is bad. But when government dabbles in areas that the private sector can do very well, we see problems. As an example, the city wants to help real estate developers, but the city handled a recent situation so badly that the mayor apologized in his address, saying “We are also taking steps to ensure we have integrity and openness when we solicit proposals for development in the core area.”

Citizens that pay attention at city hall also note there are several small groups that contribute heavily to campaigns. Then the mayor and council members vote to give financial benefits to these people. These are not isolated incidents. This behavior is repeated over and over. Some cities have laws against this type of behavior. But in Wichita, while we’re being encouraged to put “what is good for the community” above our personal self-interest, we see city hall run over by cronyism. That is, by people using city government for their own interests. In the name of the “common good,” of course.

At the end of his speech, the mayor asked citizens to “get into the game,” saying: “We need you to be a player — not a spectator — to win a better and brighter tomorrow.”

But we’ve seen what happens when people want to be involved, but not in the way the mayor and council want. Do you remember the chart of airport data? Last year I presented that information to the city council. It so happened that Sedgwick County Commissioner Karl Peterjohn had appointed me to the Airport Advisory Board, and later in that same meeting the city council voted on my appointment. I was rejected. Only one council member voted in my favor. The Wichita Eagle reported: “Mayor Carl Brewer was clear after the meeting: The city wants a positive voice on the airport advisory board, which provides advice to the council on airport-related issues.” A positive voice is more valued than a critical voice, it seems.

You may also remember how Susan Estes of Americans for Prosperity testified at a meeting of the Wichita City Council. She cited a section of the Wichita City Code that says council members shall refrain from making decisions involving, among other things, friends and business associates. She asked the mayor to observe that part of the city code. But the mayor lashed out at Estes and others and threatened a lawsuit.

At least this year the mayor didn’t mention the importance of open and transparent government, as he usually does. Because based on Activate Wichita — where there is no disagreement allowed, to rejecting board appointments simply because someone might be critical of the city’s programs, to threatening those who ask the mayor and council members to follow the laws that they passed, to the city’s hostile attitude towards the citizen’s right to know: The message we get is this: The city welcomes your involvement, but only up to a point. Question the authority, and you’re not welcome.

That’s the state of Wichita government, that government to be distinguished from the many wonderful people who live here. We can be thankful for the difference.