Voice For Liberty

Tag: Wichita city government

  • Wichita jobs and employment, April 2020

    Wichita jobs and employment, April 2020

    For the Wichita metropolitan area in April 2020, the number of unemployed persons is up, the unemployment rate is up, and the number of people working is down, all by large amounts, when compared to the same month one year ago. Seasonal data shows the same trend.

    Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows the effects of the response to the pandemic in the Wichita Metropolitan Statistical Area for April 2020.

    Click charts and tables for larger versions.

    Total nonfarm employment fell from 306,700 last April to 274,400 in April 2020, a loss of 32,300 jobs (10.5 percent). (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, employment in the nation fell by 12.9 percent. The unemployment rate in April 2020 was 17.8 percent, up from 3.0 percent one year ago.

    Considering seasonally adjusted data from the household survey, the labor force rose by 15,214 persons (4.8 percent) in April 2020 from March 2020, the number of unemployed persons rose by 50,106 (460.8 percent), and the unemployment rate was 18.3 percent, up from 3.4 percent in March. The number of employed persons not working on farms fell to 272,446 in April from 307,338 the prior month, a decline of 34,892 persons (11.4 percent).

    The following chart of the monthly change in the labor force and employment shows the magnitude of change in April overwhelming other months. Note that the labor force rose.

    The following chart of changes from the same month one year ago shows the same trend.

    The following chart of changes in employment from the same month of the previous year shows months when the Wichita MSA performed better than the nation. Over the past 12 months, the average monthly job growth for the nation was 0.23 percent, and for the Wichita MSA, 0.69 percent.

    The following two charts show changes in jobs for Wichita and the nation over longer periods. The change is calculated from the same month of the previous year. For times when the Wichita line was above the nation, Wichita was growing faster than the nation. This was often the case during the decades starting in 1990 and 2000. Since 2010, however, Wichita has rarely outperformed the nation and sometimes has been far below the nation.

  • Wichita city population rises

    Wichita city population rises

    Wichita city population rose in 2019, but is still below its recent peak.

    Each year the United States Census Bureau produces new population estimates through its Population and Housing Unit Estimates program.

    For the City of Wichita on July 1, 2019, the estimated population was 389,938. This is an increase of 707 over the prior year, which is 0.18 percent. It is below Wichita’s peak population of 390,519 in 2016 by 581 people (0.15 percent).

    When the Census Bureau produces estimates for a new year, it also revises the estimates for prior years. For the city of Wichita in recent years, the revisions have been very small, almost always less than one-tenth of one percent.

    A nearby chart plots the population of the city, along with Overland Park, which is the second-largest city in Kansas. The chart also plots the percent change from the prior year. It is common for large changes to appear in decennial census years like 2010, as estimates are recalibrated to the census.

    For the population of the Wichita metropolitan area, see Wichita metro population for 2019.

    Click for larger.
  • Wichita metro population for 2019

    Wichita metro population for 2019

    For 2019, the estimated population for the Wichita metropolitan area is up — and also down.

    Each year the United States Census Bureau produces new population estimates through its Population and Housing Unit Estimates program.

    For the Wichita Metropolitan Statistical Area, the estimated population on July 1, 2019, is 640,218. That is an increase of 2,699 (0.4 percent) from the previous year. The largest component of this growth is Natural Increase, which grew by 2,325. This is composed of 8,057 births and 5,732 deaths.

    International Migration contributed 688 to population growth, while Domestic Migration subtracted 291. A nearby table summarizes.

    The Wichita MSA is composed of Sedgwick, Butler, Harvey, and Sumner counties.

    When the Census Bureau produces estimates for a new year, it also revises the estimates for prior years. For the Wichita MSA, these revisions have been small. For 2017 and 2018, the average revision was 0.03 percent. But for 2019, the average revision was 1.20 percent, and the revision was negative, meaning the revised estimated populations are lower.

    Revisions are common, but the 2019 revision for Wichita was especially large. For 2019, the average adjustment, with all metros weighted equally, was up 0.63 percent. The two metros closest to Wichita in the proportional size of revision were Dallas-Fort Worth-Arlington, TX, down by 1.11 percent, and Nashville-Davidson–Murfreesboro–Franklin, TN, down by 1.36 percent.

    I gathered data and present a nearby table holding estimated populations for the Wichita metro starting in 2010 and for four vintages. “Vintage,” in this context, refers to the year the data was produced. (Sort of. The data released in May 2020, which provides values for 2019, is labeled “vintage 2019.”)

    Click for larger.

    With the downward revision of the estimates, we now believe the population in 2019 is roughly what we thought it was in 2014. A nearby chart plots the estimated population, shown separately based on 2019 and 2018 vintages.

  • Real personal income in states and metros

    Real personal income in states and metros

    When adjusted for regional differences, personal income in Wichita and Kansas is higher than otherwise, but growth is slow.

    The Bureau of Economic Analysis, a division of the United States Department of Commerce, generates personal income data for states and metropolitan statistical areas. I present this data in two interactive visualizations, one for states, and a second for metros.

    When presenting economic data, the term “real” commonly means that dollar amounts have been adjusted for the effects of inflation. That is the case for this data. BEA goes further in also adjusting data for regional price parity and personal consumption expenditures price index.

    The difference when using values adjusted for regional differences can be substantial. For example, when considering per capita personal income in 2018 using actual, non-adjusted dollars, Kansas ranked number 23 among the states, which is a typical value for Kansas. When adjusted for region, Kansas ranked number 16. In a nearby example from the visualization, the value of per capita personal income for Kansas is better than other states, but is growing slowly. This is easily seen when comparing Colorado to Kansas.

    Click for larger.

    In the example for metro areas in Kansas, Wichita’s per capita personal income is high, but growing slower than some areas, including the nation. (The Kansas City metro area includes Kansas City, Missouri and other areas in Missouri.)

    Click for larger.

    To learn more about this data and access the interactive visualizations, click here.

  • Wichita presents industrial revenue bonds

    Wichita presents industrial revenue bonds

    A presentation by the City of Wichita regarding IRBs is good as far as it goes, which is not far enough.

    Recently the City of Wichita prepared a short video explaining the city’s industrial revenue bonds (IRB) program. The video may be viewed on YouTube by clicking here.

    Several times the presenters emphasized that in the IRB program, the city does not lend money. They properly identify the true purpose of the program, which is to subsidize companies by allowing them to avoid paying property taxes and possibly sales taxes.

    Several times the presenters emphasized that the IRB program has no cost to the city. But that isn’t true. Part of the rationale for taxes, especially the property taxes that cities, counties, and school districts collect, is to pay for services that people and business firms demand. Well, don’t new businesses firms demand or require services from the government? And if a business is not paying its share of taxes, who is paying for the services it consumes?

    If we don’t think that a new or expanded business spurs demand for services, then we need to rethink the basis of taxation.

    The presenters mentioned the benefit-cost analysis produced for the city by Center for Economic Development and Business Research at Wichita State University and concluded that the city profits from the IRB program. This analysis purports that if the city incurs costs — either by spending one dollar or giving up one dollar of tax revenue — it will receive a certain amount in return. City policy requires that the city receive $1.30 or more in benefits for each dollar of cost. But there are issues:

    • The city says IRBs have no cost, but the benefit-cost ratio identifies costs. The city hopes the benefits outweigh these costs.
    • There is no guarantee that the city will receive any benefits, or that the benefits will be close to what the CEDBR model estimates.
    • The CEDBR model asks companies to make projections of economic activity for up to ten years in the future. Especially in the out-years, these estimates are subject to large errors.
    • No effort is made to scrutinize these projections. They are taken at face value, as supplied by the applicant company.
    • The benefits to the city are in the form of taxes paid. Taxes are a burden to those who must pay them.
    • Applicant companies do not have to demonstrate economic necessity.
    • The policy of requiring a benefit of $1.30 for each dollar of cost has many loopholes.

    Perhaps the most important policy issue is that the city realizes the benefits of increased economic activity whether or not the activity is subsidized with IRB tax breaks. The benefit-cost ratio for unsubsidized projects is infinite: All benefit, no cost. Therefore, the benefit-cost ratio is meaningful only for those projects which could not proceed without the subsidy.

    Some incentive programs require the demonstration of economic necessity. That is not the case with IRBs.

    Additionally, when the city issues IRBs and grants tax abatements, other jurisdictions are affected. Both the overlapping county and school district have their property tax collections eliminated. If a sales tax exemption is granted, the state is most prominently affected, as nearly all sales tax paid goes to the state. (For sales tax paid in Sedgwick county, the state’s share is 86.7 percent.) None of these overlapping jurisdictions can opt-out of the tax abatement that the city imposes.

  • Wichita jobs and employment, March 2020

    Wichita jobs and employment, March 2020

    For the Wichita metropolitan area in March 2020, the labor force is up, the number of unemployed persons is up, the unemployment rate is down, and the number of people working is up when compared to the same month one year ago. Seasonal data shows increases in labor force and jobs from February, with the unemployment rate unchanged. It is unclear how the pandemic has affected this data.

    Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving employment situation for the Wichita Metropolitan Statistical Area for March 2020.

    Because of the COVID-19 pandemic, it is difficult to assess the meaning of the March data. BLS gathers this data through two survey programs. For employment data derived from the Current Employment Statistics (CES) program, also known as the payroll survey or the establishment survey and which counts jobs, the estimate is for the pay period that includes the twelfth day of the month. For data from the Current Population Survey, which counts people, the estimate is for the “reference week,” which is usually the week that includes the twelfth day of the month. For the Wichita metropolitan area, here are the dates of some major events that would be expected to affect employment:

    • March 13: President Trump declares a national emergency that began on March 1.
    • March 16: Social distancing guidelines announced for the nation.
    • March 24: Kansas City metro area stay-at-home order takes effect.
    • March 25: Sedgwick County stay-at-home order takes effect.
    • March 30: Kansas stay-at-home order takes effect.

    As noted, the BLS data is collected nearer the start of the month than the end. For Wichita, these events that should affect employment occurred mostly towards the end of the month. There were also these two major events that affected employment in recent months: Spirit Aerosytems announced layoffs (2,796) that started January 22 1, according to news reports, and Textron (875) the month before 2.

    BLS also offered this guidance, and more, for the March data:

    We cannot precisely quantify the effects of the pandemic on the job market in March. However, it is clear that the decrease in employment and hours and the increase in unemployment can be ascribed to the effects of the illness and efforts to contain the virus. It is important to keep in mind that the March survey reference periods for both surveys predated many coronavirus-related business and school closures in the second half of the month. 3

    Click charts and tables for larger versions.

    Total nonfarm employment rose from 302,800 last March to 307,100 in March 2020. That’s an increase of 4,300 jobs (1.4 percent). (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, employment in the nation grew by 1.0 percent. The unemployment rate in March 2020 was 3.5 percent, down from 3.6 percent one year ago.

    Considering seasonally adjusted data from the household survey, the labor force rose by 800 persons (0.3 percent) in March 2020 from February 2020, the number of unemployed persons rose by 95 (0.9 percent), and the unemployment rate was 3.5 percent, unchanged from February January. The number of employed persons not working on farms rose to 307,367 in March from 306,662 the prior month, an increase of 705 persons (0.2 percent).

    The following chart of the monthly change in labor force and employment shows the positive trend in employment and labor force over the last year. In some months the change has been small, but always positive, with one exception.

    The following chart of changes from the same month one year ago shows a slight decline in the rate of growth of both employment and labor force, but with both still growing.

    The following chart of changes in employment from the same month of the previous year shows months when the Wichita MSA performed better than the nation. Over the past 12 months, the average monthly job growth for the nation was 1.33 percent, and for the Wichita MSA, 1.56 percent.

    The following two charts show changes in jobs for Wichita and the nation over longer periods. The change is calculated from the same month of the previous year. For times when the Wichita line was above the nation, Wichita was growing faster than the nation. This was often the case during the decades starting in 1990 and 2000. Since 2010, however, Wichita has rarely outperformed the nation and sometimes has been far below the nation.

    —
    Notes

    1. https://www.kansasworks.com/ada/mn_warn_dsp.cfm?id=2021 ↩
    2. Textron, Inc. Form 8-K, December 5, 2019. Available at https://www.sec.gov/ix?doc=/Archives/edgar/data/217346/000110465919070378/tm1924597-1_8k.htm. ↩
    3. Bureau of Labor Statistics. Frequently asked questions: The impact of the coronavirus (COVID-19) pandemic on The Employment Situation for March 2020. Available at http://www.bls.gov/cps/employment-situation-covid19-faq-march-2020.pdf. ↩
  • Should Wichita have a deputy to the mayor?

    Should Wichita have a deputy to the mayor?

    A proposal to hire a deputy or chief of staff to the Wichita mayor is a good idea which will increase transparency and accountability of elected officials.

    Tomorrow the Wichita City Council will consider a proposal to create the position of Deputy to the Mayor. I’ve excerpted the relevant portion of the agenda packet in pdf form, available here. I include partions below.

    How could a deputy or chief of staff help improve the city? As an example, at the April 14 council meeting, approval of a loan for a portion of the new water treatment was on the agenda. This was no surprise; borrowing the money had been planned for a long time. The agenda packet noted the loan amount of $280 million, which was no surprise. But the document mentioned this caveat: “capitalized interest excluded.”

    It’s no surprise that loans carry interest charges, but shouldn’t we wonder how much interest? Documents in the agenda packet provided an estimate, as the council passed an ordinance authorizing the issuance of a bond to the government of up to $331 million, meaning the capitalized interest is likely to be around $50 million.

    But you had to read a lot of material to come across this figure. It was not obvious. Sources tell me that this figure was not mentioned during the agenda review meeting, and it was not mentioned by city staff during the presentation at the council meeting. It was only when the mayor asked a question that the number was discussed. (The mayor mentioned that a constituent had asked him about it. That was me.) For more on this, see Wichita water plant financing on agenda.

    Another example: Recently the council was asked to pass an economic development incentive. The reported benefit-cost ratio did not meet the city’s established standard. There are exceptions that the city can invoke to override the standards, and the council did that. But the agenda packet did not mention that an exception would be required, although it was discussed during the meeting. See Wichita to consider tax forgiveness outside policy parameters.

    As another example, the council recently approved a profit-sharing agreement for Naftzger Park event management that contains ambiguity that could lead to disputes. Under certain conditions, depending on how and when the same calculation is performed, the event manager’s share of profits could be $0, or $25,000, or $49,999. The city could either lose $25,000 or $0. While these examples are contrived and use extreme values, they illustrate that the agreement the council passed is ambiguous. No one noticed, or if they did, they didn’t speak up, at least not publicly. See Naftzger Park event management agreement ambiguous.

    These are a few examples from this year where city staff has not served the council — and the public — very well. And these are just examples that I know of. We remember last summer when the former mayor was upset with major items being placed on the agenda by management with little or no notice.

    Whether the mayor should have a deputy like this depends on what type of relationship we want between the mayor, council, and city management. Currently, and in the past, it seems like the council and mayor operate passively, merely reacting to matters that management brings to them. “Rubberstamp” is a term often used to describe council action. Praise for management and staff is often, in my opinion, uncritically offered and unjustified.

    We need some tension, a little bit of check on the power of the city manager and city staff. We need someone to independently conduct research and advise the mayor and council so that the mayor doesn’t have to, as did Mayor Longwell last year, admit on television that he didn’t know the city’s population has declined.

    Additionally, having an independent resource who is responsible primarily to the mayor will increase the accountability of the mayor to voters. It will be less credible for the mayor to slough off responsibility to the city manager and staff.

    The proposal

    The relevant portion of the agenda packet in pdf form is available here. Excerpts follow.

    In introducing the proposal, the document states:

    This unprecedented time of crisis both economically and in public health requires professional assistance within the Mayor’s office to better serve the community, interface with city department heads and align with Council Members on shared objectives.

    This position brings the office of Wichita Mayor to a similar professional standing of every other mayor in comparable cities who enjoy the assistance of a Chief of Staff. Wichita is only one of two top 50 cities in which the Mayor does not have a Chief of Staff, or the equivalent.

    Public expectation for the position of Mayor has evolved to expect more community outreach, public accessibility and to maintain a presence throughout the city. This position gives the mayor the resources necessary to provide a similar level of public outreach as current Wichita City Council Members enjoy through the use of their full time community outreach employee, resulting in increased accountability and transparency.

    Under job description: “The Deputy to the Mayor will assist the Mayor in policy research, community outreach, special projects, communications, and other tasks as directed.”

    It is to be non-political: “This is a non-political position that prevents the participation in campaign activities as defined by K.S.A – 25-4143(h). Employee will sign a non-disclosure order (NDA).”

    How will the person be hired? “The selection committee will consist of the Mayor and a staff member appointed by the City Manager.”

  • Naftzger Park on the web: Do we care?

    Naftzger Park on the web: Do we care?

    A badly outdated portion of Wichita’s website makes me wonder: Does anyone care?

    In the Naftzger Park Facebook group that I co-administer, someone recently posted this:

    Hi! I’m [not] new to Wichita and a friend told me about a quaint and lovely Victorian style park set in the downtown area. I love little parks like these as they’re such an endearing surprise in the midst of old industrial buildings and warehouses. After seeing the pictures on your website, I can tell my friend understated the beauty of the park. I can’t wait to visit! One problem though, I can’t find the hours of park operation. Could you please tell me what time the park closes as I’d hate for people to think that I’m a bum just because I was visiting after 9:00 p.m.?

    In the next paragraph, the author confessed that the post is “pure sarcasm laced with bitterness,” because, as most Wichitans know, the Victorian Naftzger Park has been replaced with something else. While opinions vary as to whether the new park is better than the old, there is one thing of which this author is correct: “Not even a whisper of the change.”

    What hasn’t changed is the City of Wichita website, specifically the page devoted to Naftzger Park. 1 As of April 19, 2020, it shows photos of the old park and this description: “A mini-park located in the heart of downtown Wichita containing many beautiful flowers, trees and shrubs, and grass accenting the waterfall that flows into a pond. Park benches and a gazebo add to the park’s Victorian style as well as providing a quiet haven in the downtown area.”

    Wichita.gov, captured April 19, 2020. Click for larger.

    None of this, except for “mini-park located in the heart of downtown Wichita” has been true for a long time. Naftzger Park — the Victorian version — closed in May 2018, nearly two years ago, when construction started on the new version. The new version opened in March 2020.

    So the city’s website is nearly two years outdated regarding Naftzger Park, outdated in a very material manner. Does this matter? In the scenario from the start of this article, yes, it matters. For an enthusiast of these parks that might travel to Wichita for that reason: Yes, it matters. For those looking to the city’s website for current and accurate information: Yes, it matters.

    It matters for more than just Naftzger Park. Glaring examples like this cast doubt on the reliability of the rest of the city’s website. That’s a shame, because in my experience, the information on the city’s website is usually good. It could be more thorough in some simple but important ways, such as including spending records and legal notices. The city also overlooks simple ways to be innovative, such as posting fulfilled records requests.

    Outdated information like this is a symptom of someone not caring. It’s especially troubling in light of this week’s city council meeting, where many council members were effusive in their praise of the city manager during his annual performance evaluation. I imagine that the city manager doesn’t maintain the Park and Recreation section of the city’s website. Maybe the Director of Parks and Recreation doesn’t update the website. But someone does. Someone must be responsible for keeping things current.

    Naftzger Park, July 31, 2018.

    When that responsible person doesn’t care, responsibility flows upwards. Hasn’t anyone at the city noticed this badly outdated information? Have any park board members or city council members noticed? Anyone at DowntownWichita.org, the agency that, in its own words, “amplifies the energy, capital, and growth of downtown by empowering residents, visitors, and businesses to explore the possibilities of our city’s core.” Or what about someone at Visit Wichita? (To its credit, its website showcases the new version of Naftzger Park.) Or have they noticed but not cared? Or did they report the outdated page, but no one cared to act?

    It’s not the case that someone needs to spend hours creating a page for the new Naftzger Park. Just take the outdated stuff off the site.

    —
    Notes

    1. Should the city update this page, here is a link to a recent archived version: https://web.archive.org/web/20200416014239/https://www.wichita.gov/ParkandRec/CityParks/Pages/Naftzger.aspx#. ↩
  • Wichita water plant financing on agenda

    Wichita water plant financing on agenda

    The Wichita city council will consider borrowing $280 million from the federal government, and also consider issuing bonds of up to $331 million to repay the loan.

    Tomorrow the Wichita City Council will consider approving a large portion of the financing for the new Northwest Water Facility (NWWF).

    The financing comes from the United States Government through a program called Water Infrastructure Finance and Innovation Act (WIFIA), which is administered by the Environmental Protection Agency (EPA). The amount of financing is $280,860,714, which is 49 percent of the total cost of the plant. A loan from the State of Kansas is expected to cover 48 percent of the cost of the plant, so between these two sources, nearly the entire plant is financed. The state loan is expected to be considered by the council in August or September.

    Repayment of the WIFIA loan will begin in 2029 and continue until 2059. Because of the attractive terms of the loan program, EPA estimates the city will save $69,069,005 over regular municipal bond financing.

    City documents state that the interest rate on the WIFIA loan is set “by adding 0.01% to the rate for state and local government securities with a similar length of repayment.” This contradicts information from EPA and CRS, with CRS stating, “WIFIA provides credit assistance, namely direct loans, at U.S. Treasury rates, potentially lowering the cost of capital for borrowers.” See EPA summary and the Congressional Research Service in Water Infrastructure Financing: The Water Infrastructure Finance and Innovation Act (WIFIA) Program.

    Of note, while the summary documents provided by the city cite a loan amount of $280,860,714, it is important to realize that this is “capitalized interest excluded.” In an ordinance the council will consider Tuesday, there is this language: “… the City proposes to issue and deliver to the WIFIA Credit Provider a revenue bond in the principal amount not to exceed $331,000,000 (the ‘WIFIA Bond’).” The difference between the two amounts, about $50 million, is capitalized interest. The $331 million figure is not mentioned in the agenda report or the executive summary.

    The city has provided these documents in the agenda packet:

    • Agenda Report No. V-1 (Revised).docx (link)
    • Executive Summary for NWWF Financing 4-14-2020.pdf (link)
    • Basic Docs 2020B (WIFIA).pdf (link)
    • WIFIA Credit Agreement 4.7.20 – to City.pdf (link)

    For an archive of documents related to the water plant, see Wichita water plant resource center.