Wednesday, July 30, 2008

CARE, Recommending Less for More


Ahhh...those glorious days of last spring. When winter finally gave way to the green grass and flowers. Children started to play outdoors and the first robins arrived. The school district first claimed that delaying the bond vote to November would increase the cost of building a new high school by a mere $360,000.

Now, as we enter the heat of mid-summer, CARE has unveiled an all new and improved bond recommendation that is nearly identical to the old proposal. The CARE group recommends fiddling around with less than 8% of the total bond amount. However, the total recommended bond amount of $350 million remains the same.

Two questions immediately spring to mind on seeing this new proposal:

1) Who was it, among the 40 or so people who showed up at one of the CARE community meetins, that stood up and said, "We need to cut back on the athletic facilities and just plan to pay an extra $10 million for everything else."? As CARE was seeking community input with the super secret poll that forms the basis for recommendations to the BOE, did they ask the question "Would you like to pay more for less?" If not, where did the $10 million price hike come from?

2)How did CARE arrive at the $10 million figure for inflation? In the spring, interim superintendent Martin Libbert claimed that a delay until November would increase the cost for one high school by $360,000. If the district proposal were to build 27 brand new high schools a bump of $10 million might be justified.

In just three months, the cost of the plan have increased almost 3%. Even the most pessimistic economists are not claiming that inflation is 12% per year. But more importantly, what can taxpayers and parents expect in the out years? Will the FEMA shelters be completed on all the schools as the costs goes up?

The stated purpose of moving the election date was for the CARE group to educate the public about the bond issue, not to recalculate the costs of the bond. It's highly unlikely that the citizens of Wichita are clamoring to pay more for less. But that seems to be what CARE is proposing.


Wednesday, July 23, 2008

Bond Poll Results


The public is still waiting with baited breath for the release of the CARE public opinion poll on the $350 million bond issue conducted last month. True, the as yet unknown persons who funded the poll aren't required to share the results with the rest of the world. It does seem odd that CARE, or whoever, wouldn't be sharing the overwhelmingly positive poll results with the Eagle and public at large.

So, in lieu of talking about the CARE polling data, we are left with the results of a KWCH/SurveyUSA poll conducted on July 15th.

The first question, how much of an impact will gas prices and the economy have on the respondent's bond vote, sets the tone for the poll. 68% of respondents noted that it would impact their vote. It might be going out on a limb, albeit a very sturdy one, to assume that the slowing economy will make voters less likely to vote for higher taxes.

The second question isn't so black and white: "Should the vote be delayed until the economy improves?" The response was clearly that the vote should be delayed, 49% to 44%. However, this shouldn't be used as an indicator of overall support for the bond itself. Some bond supporters can clearly see that $350 million is a tough sell in a slowing economy and want a delay. Similarly, bond opponents may not want any further delays.

The third question gets to the heart of the matter: "Should the bond issue be scaled down in order to get it passed?". Again, 49% of respondents replied in the affirmative, while only 41% didn't believe the proposal should be scaled back. Both conservatives and liberals overwhelmingly (53% and 49% respectively) saw the need to scale the proposal back, although one would assume for different reasons.

The results are surprising, if the pro-bond groups are to be believed. The USD 259 website is chock full of claims that the entire community had input and is clamoring for a $350 million bond issue. CARE has had an additional 3 months to educate the public about the virtues of the bond plan.

What remains to be seen is if CARE/SJCF will propose that the school board proceed with the original bloated bond plan, submit a new proposal that nibbles around the edges, completely retools the proposal to address the real issues in the district, or suggests shelving the idea all together. Considering the money and egos involved, I'm guessing they won't concern themselves with something as insignificant as polling data.

Tuesday, July 15, 2008

It's good to be Kevass Harding

The USD 259 School Board has for the past six months been bleating about the necessity to generate an additional $350 million through a special bond issue. One of the more outspoken members of the board has been Kevass Harding. But how deep does his support for the bond issue really go? had an interesting article on the good Reverend and his business plan to take money away from the school district and sink it into the Ken-Mar shopping center which he has purchased. How is he going to do it? Why a TIF district, of course. Where is that money going to go? Let's find out...

A Tax Increment Finance district is a special taxing district in which money, from tax exempt municipal bond sales, are used to invest in property improvements. As the property values increase, the additional tax revenue goes to pay back the bonds. Recently, in Wichita and elsewhere, the TIFs have been used not just to pay for better roads, street lights and parking garages, but for improvements to private property for the benefit of the property owner.

Allen Bell, City of Wichita development guru, said the TIF money at KenMar would be used to pay for land acquisition, demolition of a small store near 13th and Oliver, landscaping, and utility improvements.

In this case, Reverend/developer Kevass Harding is going to take money from the sale of bonds to make improvements on piece of property. He will receive the benefit of those improvements in the form of ownership of property that has a much greater value. Repayment of the bonds will be spread among property owners in the entire district, not just the owner receiving the proceeds from the bond sales.

The upfront money for the improvements will be repaid by the higher tax revenues generated by the business and homeowners in the surrounding TIF district. During the 15 year bond payback period, USD 259 will not see any of the increased revenue. Because of this, both the school district and Sedgwick County have the right to refuse the creation of the TIF district.

Several months ago, Kevass Harding indicated that he would spend as much as $8 million on the property over time. I don't know Mr. Harding's personal financial information, but according to his latest Statement of Substantial Interest Form filed on July 8th of 2008, he now owns a 30% interest in H.H. Holdings LLC. This company was formed in November of last year, and in June purchased the Ken-Mar Shopping Center for more than $2.2 million.

Kevass Harding's partners in this deal, Pat Ayars from Key Construction and Nick Esterline of Landmark Commercial, are both very experienced in real estate development. What remains unclear is exactly what Harding brings to the table. Does the pastor of Dellrose Methodist Church have the assets to buy a 30% stake in a multi-million dollar real estate transaction followed by an $8 million investment? Do two of Wichita's most accomplished real estate developers need Kevass Harding's guidance on refurbishing a strip mall?

Regardless of Kevass Harding's involvement in H.H. Holdings LLC, there is an obvious conflict between the Harding's financial interest and the interests of USD 259. While Kevass Harding might believe USD 259 needs an additional $350 million, it's not going to come from his new investment property.

Thursday, July 10, 2008

Sarah Olson makes Chicken Salad


"I don't think (low turnout) is a statement that people are saying no. In fact, you could see it the other way around: People must not be that negative about it."

So says Sarah Olson, head of Citizens Alliance for Responsible Education (go ahead, google it). The problem seems to be that attendance at the Super-Duper rally meetings for the bond issue has been what can charitably described as "thin". The Wichita Eagle describes the scene:

About 40 people attended the first meeting at Seltzer Elementary School last month -- most of them school district officials or members of CARE. Subsequent meetings have drawn fewer people.

Our esteemed school board was kind enough to move the goal posts at the request of Sarah Olson and her CARE organization, to ensure that they enough time to adequately inform the public about the great advantages of the $350 million bond proposal.

This is the best CARE can do?

Nobody showed up because they all love the idea of higher property taxes and giving more money to a school district that can barely get 3/4 of the students to graduate?

Let's take Sarah absurdity to it's logical conclusion in a couple other contexts:

-If no one showed up to Mayor Brewer's campaign rally he could reasonable believe everyone thought he was doing a great job.

-No tickets are sold to a concert at the Orpheum because everyone enjoys the band's music so much they want to stay home and listen to their albums.

-Poor attendance at school would indicate that a student has already learned everything and is smarter than all the other kids.

-The lunch crowd at Crazy Joe's Possum BBQ is almost nonexistent because people just love that smoked possum too much.

Heck, even without the benefit of a secret survey, an 8 year old can figure out that if no one comes to her birthday party it doesn't mean that 'people must not be that negative about it.'