On June 28, 2016, candidates for Sedgwick County Commission participated in a forum sponsored by the League of Women Voters. Participating candidates included:
From the Wichita Pachyderm Club this week: Republican primary candidates participated in an 18th Judicial District Candidates’ Forum. This is an audio presentation recorded on June 24, 2016. Candidates included:
Division 3: Gregory D. Keith, Carl Maughan
Division 14: Linda Kirby, Patrick Walters
Division 21: Jeff Dewey, Robert A. Holubec, Quentin Pittman
Division 24: Shawn Elliott, Timothy H. Henderson, Tyler J. Roush
(For these offices, the divisions do not represent a geographical area. Everyone in Sedgwick County is able to vote for all judicial divisions.)
From the Wichita Pachyderm Club this week: A forum featuring Republican primary election candidates for Board of Sedgwick County Commissioners. This is an audio recording made on June 10, 2016.
In District 2 the candidate is Michael O’Donnell. In District 3 the candidates are Karl Peterjohn and David Dennis.
Since funding for and management of the Sedgwick County Zoo is in the news, here are some articles showing how generous the county has been with funding.
The Sedgwick County Commission has been generous with zoo funding, spending far more than agreed upon and granting a moratorium on loan payments and interest.
That’s the plan. What actually happened is quite different.
In September 2014 the commission voted to give the zoo $5.3 million to help pay for a new elephant exhibit. This contribution was not in any funding agreement, and the money was paid in January 2015. This extra funding is almost as large as the planned funding for 2015, which was about $5.6 million.
July 28, 2015. Click here for the full article.
As the Sedgwick County Zoo and its supporters criticize commissioners for failing to honor commitments, the Zoo is enjoying a deferral of loan payments and a break from accumulating interest charges.
What happened? The county loaned the zoo money to build a restaurant. But the zoo was not able to make the payments as agreed. So the county deferred the payments. I’ll be surprised if the zoo makes any payments after the deferral period ends.
July 28, 2015. Click here for the full article.
An analysis of public health spending in Sedgwick County illuminates the consequences of public spending decisions. In particular, those calling for more spending on zoos and arts must consider the lives that could be saved by diverting this spending to public health, according to analysis from Kansas Health Institute.
August 11, 2015. Click here for the full article.
Sedgwick County District Attorney Marc Bennett spoke to the Wichita Pachyderm Club, providing an update on the activities in his office. This audio presentation was recorded April 8, 2016. Bennett’s visual presentation is available here. Also, a year in review for 2015 is available here.
Sedgwick County has released its annual report on the performance and status of economic development incentives for 2015.
Section I, titled “Summary Totals for Loans & Grants Executed 2005 — 2015,” holds data that must be interpreted carefully. The report shows a total of $11,682,500 in loans and grants. Of that total, $5,000,000 was advanced to Cessna in 2008 to help with the Columbus jet program. But Cessna canceled that program and repaid the loan. It’s almost as though this activity never took place.
Of particular interest is Section III, titled “Individual Loan & Grant Incentive Results.” These programs are specifically designed to induce the creation of jobs, and in some cases capital investment. This section holds a number of evaluations that read “Not Meeting Commitment.” One example is NetApp. The county reports that “Company Commitment at Compliance Review” is 268 jobs, but the county found that “Company Performance at Compliance Review” is 124 jobs, which is 46 percent of the goal. NetApp is significant as it is one of the larger incentives offered, and the jobs have high salaries.
Another observation is the small amount of the incentives. The majority are for less than $50,000, with one being $10,000. Often these small amounts are promoted as responsible for — or at least enabling — investments of millions of dollars. These incentives come with large costs besides the cash value. Companies must apply for the incentive, county and other agency staff must evaluate the application, there is deliberation by commissioners and council members, and then effort spent producing the thoughtful and thorough report such as this produced by the Chief Financial Officer of Sedgwick County. (The City of Wichita produces no similar report, despite dangling its possibility if voters passed a sales tax. See Wichita can implement transparency, even though tax did not pass.)
Click here to access this report.
The Sedgwick County Commission makes a bid for accountability with an economic development agency, but will likely fall short of anything meaningful.
The Greater Wichita Partnership is a reorganization of local economic development agencies. It has asked the Sedgwick County Commission for $300,000 to fund a portion of its activities this year. Those on the commission who are skeptical of GWP and its predecessors have asked for measurable outcomes of the progress GWP makes.
Here is a paragraph from the agreement with GWP that commissioners will consider this week:
9. Measurable Outcomes. GWP shall be subject to measureable outcomes as it shall determine, subject to review by the Board of Sedgwick County Commissioners. GWP shall present an annual report to the Board of Sedgwick County Commissioners at a regularly-scheduled Commission meeting no later than December 31, 2016.
I appreciate the attempt by members of the county commission to ask for accountability. But this paragraph is so weak as to be meaningless. The nature of the measurable outcomes is not defined, even in broad strokes. Further, GWP gets to decide, at an unknown time, what constitutes the measurable outcomes. Then the county commission gets to “review” them, which is a weak — really, nonexistent — form of oversight. We ought to ask that the county commission “approve” them, and sooner rather than later.
But there is a bit of good news. Paragraph 10 of the agreement calls for a separate accounting fund to be created for the money the taxpayers of Sedgwick County will give to GWP. Then: “GWP agrees and understands that, by entering into this funding Agreement, any and all of its records, documents, and other information related to the Fund and the activities financed thereby shall be open and made available to the public upon request, in accordance with the Kansas Open Records Act.”
That’s good news, and a move towards the type of transparency and accountability that local governments — especially the City of Wichita — promote but finds difficult to actually deliver. Although this provision applies to only the county-supplied funds, hopefully GWP will realize that being transparent is better than being secretive.
A filing by a group seeking to recall a county commissioner declares “facts” that can’t possibly be known at this time.
Those hoping to recall Sedgwick County Commissioner Richard Ranzau have filed a petition with the Kansas Supreme Court seeking to overturn the finding of the Sedgwick County District Attorney. That finding was the petition did not meet the grounds and conditions proscribed in Kansas law.
(Many news headlines and reporting use phrases like “District Attorney blocks petition.” That’s not accurate. The DA simply ruled that the petition did not meet the legal requirements.)
In the filing, under a section title “Statement of Facts,” paragraph 2 starts with “It is the will of the electors of Sedgwick County’s District 4 to seek the removal of Richard Ranzau from office …”
I’d like to know how the petitioner knows the will of the electors (voters) of district 4, specifically that they want to remove Ranzau from office. Since August 2008, Ranzau has prevailed in all four elections regarding his current office. In each election the revealed preference — or “will” — of the voters is that they preferred Ranzau to the alternatives, both other Republicans in two primary elections, and Democrats in two general elections. Each election was contested by experienced politicians who had held offices including that of Sedgwick County Commissioner, Wichita City Council Member, Kansas State Representative, and Kansas State Senator.
The only fact we know so far is that there are 100 citizens of Sedgwick County (not just district 4 residents) who have signed up to become recall petition circulators. Should the recall petition be approved, these circulators would have to gather a large number of valid signatures in a short period of time. If that petitioning effort is successful, there will be an election. It is at that time — and only that time — that the electors (voters) of district 4 express their will regarding the recall of Richard Ranzau.
The unfortunate news of the cancellation of a new aircraft program can be a learning opportunity for Wichita.
As Wichita seeks to grow its economy, the loss of a new aircraft program at one of the city’s major employers is unwelcome news. Now it is important that our leaders and officials seek to learn lessons from this loss. But first, we must acknowledge the loss. Wichita economic development officials are quick to trumpet successes, but so far there is no mention of this loss from the city or its economic development agencies.
The project received state, local and federal incentives. Lots of incentives. These incentives took the form of cash grants, forgiveness of taxes that would otherwise be due, and the ability to reroute its employee withholding taxes for the company’s exclusive benefit. So one lesson is that when local officials complain of the lack of money available for incentives, they are not being truthful.
A second lesson is the limited ability of incentives to overcome obstacles. In this case, the company said the incentives were necessary to make the project economically feasible. Incentives were awarded, but the project failed.
There are some important public policy issues that should be discussed:
Did the incentives induce Bombardier to take risks that it would not have taken had it been investing its own funds, or funds it had to raise from stockholders and debtholders?
Will the politicians that took credit for landing the Model 85 and its jobs now recognize the futility of their efforts?
Will the government agencies that took credit for creating jobs adjust their records?
Incentives like these are often justified using a benefit-cost ratio. This incident reminds us that these calculations are valid only if the investment works as planned. Will local governments recalculate the benefit-cost ratios based on the new information we now have?
Perhaps most important: Who has to pay the costs of these incentives? Part of the cost of this company’s investment, along with the accompanying risk, is spread to a class of business firms that can’t afford additional cost and risk. These are young startup firms, the entrepreneurial firms that we need to nurture in order to have real and sustainable economic growth and jobs. This action — the award of incentives to an established company — is harmful to the Wichita economy for its strangling effect on entrepreneurship and young companies. As this company and others receive incentives and escape paying taxes, others have to pay.
There’s plenty of evidence that entrepreneurship, in particular young business firms, are the key to economic growth. But Wichita’s economic development policies, as evidenced by this action, are definitely stacked against the entrepreneur. As Wichita props up its established industries, it makes it more difficult for young firms to thrive. 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. But as we see in the unfortunate news from Bombardier, this is not the case. (See Kansas economic growth policy should embrace dynamism and How to grow the Kansas economy.)