Category Archives: Wichita city government

Wichita property tax rate: Up again

The City of Wichita says it hasn’t raised its property mill levy in many years. But data shows the mill levy has risen, and its use has shifted from debt service to current consumption.

Wichita mill levy rates. This table holds only the taxes levied by the City of Wichita and not any overlapping jurisdictions.
Wichita mill levy rates. This table holds only the taxes levied by the City of Wichita and not any overlapping jurisdictions.
In 1994 the City of Wichita mill levy rate was 31.290. In 2015 it was 32.686, based on the city’s Comprehensive Annual Financial Report and the Sedgwick County Clerk. That’s an increase of 1.396 mills, or 4.46 percent, since 1994. (These are for taxes levied by the City of Wichita only, and do not include any overlapping jurisdictions.)

The Wichita City Council did not take explicit action to raise this rate. Instead, the rate is set by the county based on the city’s budgeted spending and the assessed value of taxable property subject to Wichita taxation.

Wichita mill levy rates. Click for larger version.
Wichita mill levy rates. Click for larger version.
While the city doesn’t have control over the assessed value of property, it does have control over the amount it decides to spend.

Change in Wichita mill levy rates, year-to-year and cumulative. Click for larger version.
Change in Wichita mill levy rates, year-to-year and cumulative. Click for larger version.
Also, while some may argue that an increase of 4.46 percent over two decades is not very much, this is an increase in a rate of taxation, not actual tax revenue. As property values rise, and as the mill levy rises, property tax bills rise rapidly.

The total amount of property tax levied is the mill levy rate multiplied by the assessed value of taxable property. This amount has risen, due to these factors:

  • Appreciation in the value of property
  • An increase in the amount of property
  • Spending decisions made by the Wichita City Council

Application of tax revenue has shifted

Wichita mill levy, percent dedicated to debt service. Click for larger version.
Wichita mill levy, percent dedicated to debt service. Click for larger version.
The allocation of city property tax revenue has shifted over the years. According to the 2010 City Manager’s Policy Message, page CM-2, “One mill of property tax revenue will be shifted from the Debt Service Fund to the General Fund. In 2011 and 2012, one mill of property tax will be shifted to the General Fund to provide supplemental financing. The shift will last two years, and in 2013, one mill will be shifted back to the Debt Service Fund. The additional millage will provide a combined $5 million for economic development opportunities.”

In 2005 the mill levy dedicated to debt service was 10.022. In 2015 it was 8.509. That’s a reduction of 1.513 mills (15.1 percent) of property tax revenue dedicated for paying off debt. Another interpretation of this is that in 2005, 31.4 percent of Wichita property tax revenue was dedicated to debt service. In 2015 it was 26.0 percent.

This shift has not caused the city to delay paying off debt. This city is making its scheduled payments. But we should recognize that property tax revenue that could have been used to retire debt has instead been shifted to support current spending. Instead of spending this money on current consumption — including economic development spending that has produced little result — we could have, for example, used that money to purchase some of our outstanding bonds.

Despite the data that is readily available in the city’s comprehensive annual financial reports, some choose to remain misinformed and/or uninformed. The following video from 2012 provides insight into the level of knowledge of some former elected officials and city staff. Based on recent discussions with city officials, things have not improved regarding present staff.

Wichita doesn’t have this

A small Kansas city provides an example of what Wichita should do.

For several years, the Kansas city of Lawrence has published an economic development report letting citizens know about the activities of the city in this area. The most recent edition may be viewed here.

The Lawrence report contains enough detail and length that an executive summary is provided. This is the type of information that cities should be providing, but the City of Wichita does not do this.

It’s not like the City of Wichita does not realize the desirability of providing citizens with information. In fact, Wichitans have been teased with the promise of more information in order to induce them to vote for higher taxes. During the campaign for the one cent per dollar Wichita city sales tax in 2014, a city document promised this information regarding economic development spending if the tax passed: “The process will be transparent, with reports posted online outlining expenditures and expected outcomes.” (This is what Lawrence has been doing for several years.)

The “Yes Wichita” campaign promised, “Reports will be measured and reported publicly.” (But “Yes Wichita” was a campaign group and not an entity whose promises can be relied on, and can’t be held accountable for failure to perform.)

These are good ideas. The city should implement them even though the sales tax did not pass. If it’s good for citizens to have this type of information if the sales tax had passed, it’s good for them to know in any circumstance, because the city (and other overlapping governmental jurisdictions) still spends a lot on economic development.

Why is this information not available? Is the communications staff overwhelmed, with no time to provide this type of information?

During the sales tax campaign Wichita city staff had time to prepare news releases with titles like “City to Compete in Chili Cook-off” and “Jerry Seinfeld Returns to Century II.”

Since then the city has hired additional communications staff, adding a Strategic Communications Director last spring.

Wichitans need to know that besides living in a city that doesn’t provide much information about its operations, the city believes it is doing a good job. Here is a Wichita city news release from 2013:

“The City Council has stressed the importance of transparency for this organization,” City Manager Robert Layton said. “We’re honored to receive a Sunny Award and we will continue to empower and engage citizens by providing information necessary to keep them informed on the actions their government is taking on their behalf.”

When I’ve expressed frustration with the process of asking for information from the city, communications staff told me this: “I should note that the City has won multiple awards for openness and citizen participation, but City leaders recognize this work is never done. They strive each and every day to become more open and transparent and will continue to do so.”

Wichitans need to wonder:

  • Why can’t we have the same information about our city government that residents of Lawrence have?

  • Was transparency promised only to get people to vote for the sales tax?

  • Is transparency really a governing principle of our city?

What else can Wichita do for downtown companies?

With all Wichita has done, it may not be enough.

Within a month, these two headlines appeared in the opinion pages of the Wichita Eagle:

Investment in downtown Wichita is impressive 1

State and local leaders need to help meet Cargill’s needs 2

The second headline was in response to the news story “Cargill plans to move its Wichita headquarters — but where?” 3 In this story, Carrie Rengers reports “Cargill is looking to move its Wichita headquarters, but whether that’s within downtown, where it already is, or outside of it or even outside of Kansas is unclear. … City and state officials are working in full gear to make sure Wichita — downtown specifically — is the option Cargill selects.”

Rengers reports that Wichita city officials say no specific incentives have been offered to Cargill, but “any incentives likely would involve infrastructure help, such as with parking, or assistance with easing the process for a new building, such as with permitting.” Wichita Mayor Jeff Longwell says “cash incentive won’t be an option,” according to Rengers.

A Cargill official says that the company needs to attract millennials and younger people, who are not attracted to “traditional office space and office-type buildings.”

Now, consider the first opinion headline: “Investment in downtown Wichita is impressive.” In this op-ed, Phillip Brownlee writes “It’s encouraging that investment in downtown Wichita is continuing — and that it is mostly privately funded. A vibrant downtown is important to the city’s image and to attracting and retaining young adults. More than $1 billion in private and public investment has occurred downtown in the past decade. About $675 million of that investment has been privately funded, and $411 million has been public projects, according to Wichita Downtown Development Corp.”

Brownlee goes on to note other investments, such as 800 new apartment units “in the works.”

On the importance of downtown, Brownlee writes “City leaders have long recognized the value of a healthy downtown. Besides the symbolic importance of not having a lot of empty buildings, many young adults prefer an urban environment. That makes downtown important even for businesses not located there, because it can help or hurt their ability to recruit and retain young professionals.”

I see a discontinuity. Our city’s leaders — opinion, elected, and bureaucratic — brag about all the investment in downtown Wichita, public and private, yet it doesn’t seem to be enough to retain a major Wichita employer in downtown.

At least editorialist Rhonda Holman recognizes the problem in her column: “It’s concerning that Cargill’s stated intentions to relocate and consolidate have not included a commitment to remain downtown or even in Wichita or Kansas.” What is her solution? “Elected and business leaders need to be creative and assertive in helping Cargill meet its needs.”

I share Holman’s concern. It’s very troubling that with $411 million in private investment over the past decade, downtown Wichita still isn’t attractive enough to retain Cargill, if the company’s intent to move is real and genuine. And advising the same group of people who have been in power during the decline of the Wichita economy to be “creative and assertive” is a solution?

What’s even more disconcerting is that the person who has overseen much of this downtown spending has been promoted. Now Jeff Fluhr of Wichita Downtown Development Corporation is president of Greater Wichita Partnership, with responsibility “to grow the regional economy.”

Forgive me if I’m underwhelmed.

Regulation
One of the things that may be offered to Cargill, according to Rengers, is “assistance with easing the process for a new building, such as with permitting.” This is a big red flag on a very tall flagpole. If the city has regulations so onerous that they are a consideration as to whether to locate in Wichita, this is something that must be fixed immediately. But the instinct of the Wichita City Council and city bureaucrats is to create more regulations covering everything from the striping of parking lots to the personal hygiene of taxi drivers.

Cash incentives
Mayor Longwell says there will be no cash incentives offered to Cargill. Instead, something like help with parking may be offered. This might take the form of building a parking garage for Cargill. We should ask: What is the difference between giving cash to Cargill and building a parking garage for Cargill’s use? There really isn’t a meaningful difference, except for Cargill. That’s because cash incentives are taxable income. Free use of a parking garage isn’t taxable. 4 5

Further, Cargill may qualify for PEAK, or Promoting Employment Across Kansas.6 This program allows companies to retain 95 percent of the payroll withholding tax of employees. The original intent of this program was to lure companies to locate in Kansas, but in recent years the program has been expanded to include incentivizing companies to remain in Kansas. While this is a state program and not a city program under the mayor’s control, PEAK benefits are more valuable than cash.


Notes

  1. Brownlee, Phillip. Investment in downtown Wichita is impressive. Wichita Eagle. March 5, 2016. Available at www.kansas.com/opinion/editorials/article64129977.html.
  2. Holman, Rhonda. State and local leaders need to help meet Cargill’s needs. Wichita Eagle. April 1, 2016. Available at www.kansas.com/opinion/opn-columns-blogs/now-consider-this/article69534982.html.
  3. Rengers, Carrie. Cargill plans to move its Wichita headquarters — but where? Wichita Eagle. March 29, 2016. Available at www.kansas.com/news/business/biz-columns-blogs/carrie-rengers/article68700517.html.
  4. Journal of Accountancy, (2009). Location Tax Incentive Not Federal Taxable Income. Available at: www.journalofaccountancy.com/issues/2009/apr/locationtaxincentive.html.
  5. American Institute of CPAs, (2015). Federal Treatment of State and Local Tax Incentives. Available at: www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2008/CorpTax/Federaltreat.jsp.
  6. Weeks, Bob. In Kansas, PEAK has a leak. Voice For Liberty in Wichita. Available at wichitaliberty.org/kansas-government/kansas-peak-leak/.

Wichita City Council speaks on blight

Wichita City Council members speak in opposition to Kansas Governor Sam Brownback’s veto of Senate Bill 338, which would have given cities additional power to take property. April 12, 2016. View below, or click here to view at YouTube. For more on this issue, see Governor Brownback, please veto this harmful bill.

Wichita economic development and capacity

An expansion fueled by incentives is welcome, but illustrates a larger problem with Wichita-area economic development.

Last week a Wichita company received economic development incentives in conjunction with an expansion. This is the third incentive the company has received in four years. The incentives are forgiven property taxes and sales taxes. 1 Simply, the company is allowed to skip paying many of the same taxes that everyone else must pay, including low-income households paying sales tax on groceries.

While the expansion of this company is welcome news, the hoopla surrounding it shows how we can’t rely on government intervention to pull Wichita out of its slump. Here are some figures.

According to the Bureau of Labor Statistics, Wichita metropolitan area employment is 14,500 less than its peak in 2008. Manufacturing jobs are down by 23,600 from the peak in 1998, or down by 15,400 from 2008. 2

In 2012 when this company requested an incentive, its employment was given as 110. 3 Current employment is given as 130, and by 2021, the company is required to employee 188 people. 4

So if everything goes as planned, 5 three economic development incentives programs will boost a company’s employment from 110 to 188. That’s an increase of 78 jobs over nine years, or about nine jobs per year.

If we look at these jobs in the larger context, we see that these jobs represent 0.5 percent of the jobs lost in the Wichita area since 2008. If we are relying on these jobs to spur a renaissance of manufacturing in Wichita, they represent 0.3 percent of manufacturing jobs lost since its peak.

This company and these three economic development incentives are not the only efforts the city has made. Other incentives to other companies have created jobs. But this company is considered a significant and major success. The awarding of this inventive was evidently such an uncommon event that it merited a large article in the Wichita Eagle. In his remarks, according to meeting minutes, Wichita Mayor Jeff Longwell said “this is how we move Wichita forward” and “this is how we grow our businesses here in Wichita and help them be successful.”

The jobs are welcome. But this incident and many others like it reveal a capacity problem, which is this: We need to be creating nine jobs every day in order to make any significant progress in economic growth. If it takes this much effort to create 78 jobs over nine years, how much effort will it take to create the many thousands of jobs we need to create every year?

A related problem is that we don’t know how many jobs are created by the city’s economic development efforts. As part of a campaign for a city sales tax in 2014, the city promised a web site to track the progress of jobs created. The sales tax didn’t pass, but the city still engages in economic development, and still does not track results. At least not publicly, and when I’ve asked, the results provided have been sketchy and incomplete.

On top of this, we don’t know if the incentives were necessary to enable the company to expand. Usually city documents state that incentives are necessary to make economic activity “viable.” No such claim was made in the documents supporting this incentive.

The large amount of bureaucratic effort and cost spent to obtain a relatively small number of jobs lets us know that we need to do something else in order to grow our local economy. We need to create a dynamic economy, focusing our efforts on creating an environment where growth can occur organically without management by government. Dr. Art Hall’s paper
Embracing Dynamism: The Next Phase in Kansas Economic Development Policy provides much more information on the need for this.

Another thing we can do to help organically grow our economy and jobs is to reform our local regulatory regime. Recently Kansas Policy Institute released a study of regulation and its impact at the state and local level. This is different from most investigations of regulation, as they usually focus on regulation at the federal level.

Business Perceptions of the Economic Impact of State and Local Government Regulation coverThe study is titled “Business Perceptions of the Economic Impact of State and Local Government Regulation.” It was conducted by the Hugo Wall School of Public Affairs at Wichita State University. Click here to view the entire document.

Our civic leaders say that our economic development efforts must be reformed. Will the path forward be a dynamic economy and reformed regulation? Or will it be more bureaucracy, handfuls of jobs at a time?


Notes

  1. Wichita City Council meeting agenda, April 5, 2016, p. 12.
  2. According to the Bureau of Labor Statistics, the peak of nonfarm employment in the Wichita metropolitan area was in 2008, where employment averaged 310,500. For 2015, employment averaged 296,000. That’s a loss of 14,500 jobs. For manufacturing jobs, the peak was 1998, when employment in this field was 75,900. In 2008 the figure was 67,700 jobs, and in 2015, 52,300 jobs. This is a loss of 23,600 jobs from manufacturing’s peak, or of 15,400 jobs from Wichita peak employment in 2008.
  3. Wichita City Council meeting agenda, September 11, 2012, p. 45
  4. Wichita City Council meeting agenda, April 5, 2016, p. 12.
  5. So far, employment is not progressing as planned. In the 2012 agenda item, it was said that employment would rise by 50 jobs over the next five years, which you by 2017. Current employment, according to the current city council agenda, is 130, which is 30 jobs short. The deadline for this projection has not yet arrived.

Wichita on verge of new regulatory regime

The Wichita City Council is likely to create a new regulatory regime for massage businesses in response to a problem that is already addressed by strict laws.

During a presentation to the Wichita City Council on February 23, 2016, police officials reported on a number of investigations and arrests. In 2015, there were 22 arrests for human trafficking and other violations. The presentation did not include what comprised “other violations,” nor did it contain any information about the disposition of these cases.

If the city is concerned about prostitution and child trafficking, the latter being a serious crime, we already have strong laws concerning this. As far as the two crimes being related: Prostitutes and pimps are already criminals, according to the law. Committing more crimes like child trafficking is just another step down the path they’ve already chosen.

A solution is to bring prostitution out of the shadows. Stop making consensual behavior between adults a crime. Then police can focus on actual and serious crime, like child trafficking.

But the zeal of the Wichita City Council for creating new regulatory regime is likely to overwhelm any rational thought about the problem. Now Wichita massage business owners and therapists are likely to be saddled with onerous licensing requirements. To become a newly-licensed therapist, you must possess one of several educational credentials, one of which is 500 hours of training. Existing therapists must meet similar requirements.

City officials note that the existing local massage industry requested this regulation. That’s not surprising. The purpose of nearly all occupational licensure laws is to restrict entry to the industry so that existing practitioners can charge higher rates. That is a scam, especially against low-income people that need a masseuse or a plumber. It is also a burden to people who want to become plumbers, barbers, massage therapists, or one of the many other licensed occupations.

It is both shocking and disappointing to realize that Wichita city bureaucrats and council members do not realize these economic realities. Another economic reality is that when licensing requirements are strict, the quality of service that many people receive declines. When investigating the demand for licensed plumbers, researchers found this:1

This proxy assumes that the more stringent are the barriers the higher will be the cost of licensed service and the smaller will be its quantity. These two effects increase the motivation of consumers to substitute their own services for those of trained professionals. This substitution process should show up in rising retail sales of plumbing supplies in more tightly restrictive states since licensed plumbers will generally purchase supplies wholesale. The implicit assumption is this causal chain is that self-service is on the average of lower quality than could be obtained from even a marginally trained journeyman plumber.

When presented with a convincing but fake credential, how diligently with Wichita officials investigate?
When presented with a convincing but fake credential, how diligently with Wichita officials investigate?
In other words, when strict licensure requirements make plumbers expensive, more people do their plumbing work themselves, and this work is likely to be of lower quality. It’s quite a stretch (literally and figuratively) to apply this reasoning to do-it-yourself massage, but here’s another economic reality: The more difficult it is to achieve a credential, the greater is the incentive to cheat. You don’t have to search very far before you find vendors advertising their services like this:

We are one of the oldest and most trusted seller of fake diplomas on the web. We use real diploma paper, the same paper that most major universities and high schools use. We also use professional security paper for our fake transcripts. We have more than 12 years experience in printing fake diplomas. You can rest assured that your fake diploma or fake transcript will look very authentic. We offer many different types of fake diplomas and fake certificates such as, FAKE GEDs, fake college diploma, fake university degree, fake high school diploma, fake college degree, or fake high school transcripts and fake skill certificate.

How diligently will Wichita’s bureaucratic machinery investigate when presented with a fake diploma certificate and transcript? The city’s record is not good. After the city passed new taxicab regulations, somehow the regulation that prohibited convicted sex offenders from receiving licenses was not implemented effectively. The city granted a taxi driver license to a man who was on the state sex offender registry. He raped a passenger.

The city council should reject these regulations and devote the city’s resources to protecting people from actual crime.

Limiting economic opportunity

Kansas occupational license requirements, with proposed Wichita massage therapists. Click for larger.
Kansas occupational license requirements, with proposed Wichita massage therapists. Click for larger.
The Wichita City Council is concerned about human trafficking for the purposes of prostitution. That’s good. But the response the council is considering — which is licensing massage therapists — is not needed. We have strict laws already on the books that make human trafficking a serious criminal offense, which it is. The proposed Wichita regulations will simply make it more difficult for honest people to become massage therapists. Criminals will operate illegally. They are criminals, after all. Or, they will easily obtain false credentials.

Kansas already has many burdensome occupational licensure requirements that limit economic opportunity and protect entrenched interests. Nearby is a chart of the number of days training or experience required to obtain a license to work in various fields, according to Institute for Justice in 2012. 2 I’ve added the proposed Wichita massage therapist requirements. As you can see, it will require more than twice as much education to become a massage therapist as is required to become an emergency medical technician. How does that make sense?

Comparing the proposed Wichita requirements to the nation, we find that the Wichita standard is quite lax. 39 states license massage therapists, with the average education or training requirement being 139 days, with the range being from 117 days to 327 days3. Wichita is proposing 83 days, which might inspire one to ask this question: If the Wichita City Council is truly concerned about protecting Wichitans from getting a bad massage, why is it proposing such minimal requirements, compared to other states?

In reality, the high barriers to becoming a massage therapist in many states is testimony to the massage industry’s success in erecting barriers to entry. By making it difficult to become a massage therapist, the supply is lower than it could be, and prices are higher. Consumers lose. Upward economic opportunity is lost.

The purpose of nearly all occupational licensure laws is to restrict entry to the industry so that existing practitioners can charge higher rates. That is a scam, especially against low-income people that need a masseuse or a plumber. It is also a burden to people who want to become plumbers, barbers, massage therapists, or one of the many other licensed occupations.


Notes

  1. Carroll, Sidney L., and Robert J. Gaston. “Occupational Restrictions and the Quality of Service Received: Some Evidence.” Southern Economic Journal 47.4 (1981): 959–976.
  2. Institute for Justice, (2012). License to Work. Available at: ij.org/report/license-to-work/ Accessed 29 Feb. 2016.
  3. ibid

In Wichita, the phased approach to water supply can save a bundle

In 2014 the City of Wichita recommended voters spend $250 million on a new water supply. But since voters rejected the tax to support that spending, the cost of providing adequate water has dropped, and dropped a lot.

The events surrounding the need for a new water supply is a troubling episode in the history of Wichita government. During the prelude to the November 2014 election, citizens were presented with a gloomy scenario that could be fixed only with a sales tax and the spending of $250 million. After voters said no to that, new plans emerged that are much less expensive. Lily Tomlin once said “No matter how cynical you become, it’s never enough to keep up.” This episode shows Wichita city leaders — both in and out of government — reinforcing the truth of Tomlin’s observation.

On December 1, 2015, the Wichita City Council held a workshop on the topic “Phased Approach for New Water Supply.”1 Alan King, Director of Public Works and Utilities, was the presenter. King emphasized that the impetus for a new water supply was for drought protection: “We presently have enough water with our current water resources to last us through our planning period of 2060, without drought.”

He continued: “When we come and talk to you about additional water resources, it is really only for one purpose, and that is drought protection. If there was no drought, we have no need. The water resources that we come in and are talking to you about, the only value they have for us is in drought protection.”

But a city document leading up to the sales tax election presented a different scenario. It threatened a lack of water for even residential use: “Building a new supply, along with conservation efforts, is the lowest cost option for providing sufficient water through 2060. Significant conservation will be needed if the current supplies are the sole sources of water for the coming decades; sever [sic] conservation requirements could be harmful to local businesses and quality of life. Adding a new water supply would provide enough water for future growth for the community’s residential, commercial, and industrial base.”2

This is an important point. We have sufficient water except for a period of extended drought. Even in that case, there is sufficient water for residential, commercial, and industrial use. The purpose of a new water supply is to avoid restrictions on outdoor watering, and in the most extreme drought, a savings of 15 percent of indoor water usage.

In his December presentation to the council, King presented several phases that the city can take. The first three have no cost, and King said these are underway.

After that, the city can spend $23 million for new wells and rehabilitation of existing wells at the ASR site.

After that, there is the possibility of “operational credits,” which involve a change to state regulations. If the state approves, the city can receive credits for sending ASR water directly to Wichita instead of recharging it in the Equus Beds. If not approved, the city could spend $47.2 million for new recharge wells in 2022. If these wells are built, the cost rises to $70.2 million. (On January 22 King made a presentation to the Equus-Walnut Regional Advisory Committee on this topic.3)

Phased Approach for New Water Supply. Click for larger.
Phased Approach for New Water Supply. Click for larger.
There is also the matter of the parallel pipeline. The existing pipeline from the Equus Beds and ASR to the city’s downtown water plant is old and won’t support higher rates of water transmission. The proposed parallel pipeline provides not only redundancy of a major part of our water infrastructure, but also increased capacity. The cost of this, estimated in 2014 at $86 million, was included in the $250 million price tag for ASR expansion. If the parallel pipeline cost is added to the previous phase costs, the cost rises to either $109 million or $156.2 million, depending on the fate of the operational credits regulation reform.

Either way, the cost is much less than the $250 million the city asked voters to consider in November 2014. And I think I’m being charitable of motives when I say “consider.” The clear and revealed preference of the city council and the city’s political class was passage of the sales tax, meaning the city would spend $250 million to achieve something the city now says can be provided for $109 million or $156.2 million. (Well, everyone except then-city council member and now-mayor Jeff Longwell, but his vote against placing the sales tax on the ballot was a naked political calculation.)

In information the city presented to voters in the run up to the November 2014 election, the city promised large water bill increases if the sales tax vote failed, writing: “If a new water supply is funded only through water rate increases, the capital cost portion of the rate will increase an estimated 24%. This is in addition to anticipated annual rate increases.”4

Possible water bill increases. Click for larger.
Possible water bill increases. Click for larger.
King’s 2015 presentation to the council showed increases of nine percent for residential, commercial, and industrial customers.5

Citizens ought to wonder what lessons may be learned from this. Furthermore, I don’t believe there has been any coverage of this in the city’s mainstream news media. That is a problem, too. For more on this problem, see Wichita Eagle, where are you?


Notes

  1. City of Wichita workshop. Phased Approach for New Water Supply. Video available at https://youtu.be/mNQ26-VZBSA.
  2. Building A Better Future: A Proposed Sales Tax for Basic Services, City of Wichita, June 13, 2014. Available at http://www.wichita.gov/Government/Departments/Finance/FinancialDocuments/Sales%20Tax%20Proposal%20for%20Basic%20Services.pdf.
  3. Equus-Walnut Regional Advisory Committee Meeting Notes. Available at http://www.kwo.org/RACs/2016_RAC%20Notes/doc_EQW_Min_January_012216_mu.pdf.
  4. Plans & Background on Proposed 1¢ Sales Tax, City of Wichita, 2014. Available at https://drive.google.com/file/d/0B97azj3TSm9MS0lCQncxQkp4ODg/.
  5. Phased Approach for New Water Supply, Presentation to Wichita City Council, December 1, 2015, page 30. Available at http://wichita.gov/Government/Council/Agendas/2015-12-01%20Phased%20Approach%20for%20New%20Water%20Supply.pdf.

Wichita TIF district disbands; taxpayers on the hook

A real estate development in College Hill was not successful. What does this mean for city taxpayers?

ParkstoneSeeking to promote the redevelopment of land northeast of Douglas and Hillside, the City of Wichita entered into agreements with Loveland Properties, LLC, College Hill Urban Village LLC, and CHUV Inc. The original plans were grand: A Northeast Brownstone Complex located at the northeast corner of Victor and Rutan, a Condominium Tower and Brownstone Complex, a West Brownstone Complex, and the South Retail/Residential Complex. A city analysis in 2007 projected that by 2010 the value of these projects would be $61,817,932.

Unfortunately, this project did not proceed as planned. The Northeast Brownstone Complex was built, and nothing else. Those brownstone condominiums proved difficult to sell. The project held great promise, but for whatever reasons things did not work as planned, and the city has lost an opportunity for progress.

The questions now are: What is the impact on taxpayers? Is there anything to learn as the city moves forward with other public-private partnerships?

City documents tell the story of this project, if you know how to read between the lines. 1

City document says: “The City financed $3,685,000 in TIF bonds in 2014.”
What it means to you: Tax increment financing, or TIF, is a method of economic development financing whereby additional property taxes (the “increment”) are redirected back to a real estate development. In this case, the city sold these bonds and gave the proceeds to the developer. Then — according to plan — as property values rose, the correspondingly higher property taxes generated by the development would pay off the bonds. Except, property values did not rise. So who pays? According to the bond documents, 2 “The full faith, credit and resources of the Issuer are hereby pledged for the payment of the principal of and interest on this Bond.” The Issuer is the City of Wichita, and the resources the city has to pledge are taxes it collects from its taxpayers.

ParkstoneCity document says: “An additional amount of tax exempt expenses related to the project, totaling $1,785,000, were paid off by the Finance Department using cash from the Debt Service Fund.”
What it means to you: These costs were to be paid by the developer, but the developer did not pay. So, the city’s Debt Service Fund was used. The Debt Service Fund gets its money from taxpayers, and this money is being used to pay off a debt owed by a private person. This is necessary because the debt payment is guaranteed by the city, which in turns means it is guaranteed by the taxpayers. If not spent to satisfy the debt for this project, this money might have been used to pay off other city debt, reduce taxes, pay for more police and firemen, fix streets, and satisfy other needs.

City document says: “The City will be responsible for maintenance and property taxes for the property until the property can be sold.”
What it means to you: More expense for city taxpayers.

ParkstoneCity document says: “Any tax increment generated from existing and future development will be used to repay TIF bonds. Staff does not expect remaining TIF revenue to be sufficient to repay the outstanding debt.”
What it means to you: As explained above, taxpayers are on the hook for these bonds.

The original agreement with the developer says: “In addition to all the terms, conditions and procedures for fulfilling these obligations, the Development Agreement also provides for a Tax Increment Shortfall Guaranty in which the developer and other private entities with ownership interest in the project are required to pay the City any shortfall in TIF revenue available to pay debt service on TIF bonds.”
What it means to you: Nothing. It should mean something. The city tells us its participation in these ventures is free of risk to citizens. That’s because recipients of incentives like TIF pledge to hold the city harmless if things don’t work out as planned. In this case, if the TIF district revenue is not enough to pay the TIF district bonds, the developer has pledged to pay the difference. But it is unlikely that the city will be able to collect on the promise made by this developer.

But there may be good news: The first phase of the project, the brownstones, is now owned by Legacy Bank. Hopefully, the city will be able to collect the TIF shortfall from this new owner so that taxpayers don’t have to pay.

The project plan formulated by the city says: “Net tax increment revenue is available to pay debt service on outstanding general obligation bonds issued to finance eligible project costs.” This statement is true if everything works as planned. But real estate development is risky. Things may not work out as planned. City documents don’t tell taxpayers this. Instead, city leaders present these projects as though everything will work out as planned.

There is some undeveloped land that was to be used in future phases of the project. But even empty land is harmful to city taxpayers, as city documents state: “The developer has not paid property taxes on the parcels from 2010 to 2015, resulting in $400,080 in current and delinquent taxes owed. The City will now be responsible for the taxes.”


Notes

  1. Wichita City Council Agenda Packet, March 15, 2016. Available here.
  2. From the Additional Provisions of the series 813 bonds: General Obligations. The Bonds constitute general obligations of the Issuer payable as to both principal and interest, in part from special assessments levied upon the property benefited by the construction of the Improvements (as said term is described in the Bond Resolution), in part from incremental property tax revenues derived in certain tax increment financing districts within the Issuer and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer, the balance being payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby pledged for the payment of the principal of and interest on this Bond and the issue of which it is a part as the same respectively become due

Wichita: A conversation for a positive community and city agenda

Wichita City Manager Robert Layton held a discussion titled “What are Wichita’s Strengths and Weaknesses: A Conversation for a Positive Community and City Agenda” at the February 26, 2016 luncheon of the Wichita Pachyderm Club. Notes were taken by an assistant and can be viewed here.

View below, or click here to view in high definition at YouTube. Videography and production by Paul Soutar.

Wichita economic development items this week

Two economic development items on tap in Wichita this week illustrate failures or shortcomings of the regime.

Update: Both items passed by seven to zero votes at the March 1, 2016 council meeting.

This week the Wichita City Council will consider two economic development items.

The first item concerns a company named Epic Sports. In 2012 this company received property tax abatements from the City of Wichita in exchange for a 100 percent property tax exemption. The measure passed by a vote of six to one, with former council member Michael O’Donnell voting no.

Now Epic Sports has found greener pastures, it seems. Well, it didn’t just find them, it sought them, according to city documents: “The company approached economic development professionals in Butler County regarding incentives.” The same documents note “[Butler County] professionals did not target Epic Sports as a prospect for relocation.” With the new focus on regionalism, we can’t have one county poaching companies from another, it seems.

The city has negotiated that Epic Sports will repay 55 percent of the forgiven property taxes.

Here’s what is notable about this incident. Epic Sports has 110 employees and says it has outgrown its Wichita facility. City documents state the company has “searched for new facilities or land in the Wichita area but could not find a suitable property.” That is remarkable, if true. Wichita does not have any warehouse space suitable for a company of 110 employees? What, may I ask, have Wichita’s many economic development professionals been doing if we have no space for such a modestly-sized company? (On the other hand, with the focus on regionalism, and with Wichita and Butler County in the same region, why should we care?)

The second item the council will consider concerns a company that received a property tax exemption based on a commitment to invest a certain amount of capital and create a certain number of jobs. While the capital investment was made, the company has not met the jobs goal. In this case the city is invoking a portion of its economic development policy which allows modification of an incentive agreement based on poor economic conditions. If the Current Conditions Index, a product of the Center for Economic Development and Business Research at Wichita State University, drops by five or more points during the term of an incentive agreement, the city can make a modification. Based on this, the city is extending the deadline for the company to meet the jobs goal. Repayment of forgiven property taxes could be required if the company does not meet the deadline.

Wichita to impose burdensome occupational requirements

The proposed massage therapist regulations in Wichita are likely to be ineffective, but will limit economic opportunity and harm consumers.

Kansas occupational license requirements, with proposed Wichita massage therapists. Click for larger.
Kansas occupational license requirements, with proposed Wichita massage therapists. Click for larger.
The Wichita City Council is concerned about human trafficking for the purposes of prostitution. That’s good. But the response the council is considering — which is licensing massage therapists — is not needed. We have strict laws already on the books that make human trafficking a serious criminal offense, which it is. The proposed Wichita regulations will simply make it more difficult for honest people to become massage therapists. Criminals will operate illegally. They are criminals, after all. Or, they will easily obtain false credentials.

Kansas already has many burdensome occupational licensure requirements that limit economic opportunity and protect entrenched interests. Nearby is a chart of the number of days training or experience required to obtain a license if various fields, according to Institute for Justice in 2012. 1 I’ve added the proposed Wichita massage therapist requirements. As you can see, it will require more than twice as much education to become a massage therapist as is required to become an emergency medical technician. How does that make sense?

Comparing the proposed Wichita requirements to the nation, we find that the Wichita standard is quite lax. 39 states license massage therapists, with the average education or training requirement being 139 days, with the range being from 117 days to 327 days2. Wichita is proposing 83 days, which might inspire one to ask this question: If the Wichita City Council is truly concerned about protecting Wichitans from getting a bad massage, why is it proposing such minimal requirements, compared to other states?

In reality, the high barriers to becoming a massage therapist in many states is testimony to the massage industry’s success in erecting barriers to entry. By making it difficult to become a massage therapist, the supply is lower than it could be, and prices are higher. Consumers lose.

As has been observed by myself: “City officials note that the existing local massage industry requested this regulation. That’s not surprising. The purpose of nearly all occupational licensure laws is to restrict entry to the industry so that existing practitioners can charge higher rates. That is a scam, especially against low-income people that need a masseuse or a plumber. It is also a burden to people who want to become plumbers, barbers, massage therapists, or one of the many other licensed occupations.” 3


Notes

  1. Institute for Justice, (2012). License to Work. Available at: ij.org/report/license-to-work/ Accessed 29 Feb. 2016.
  2. ibid
  3. Weeks, B. (2016). Massage business regulations likely to be ineffective, but will be onerous. Voice For Liberty in Wichita. Available at: wichitaliberty.org/wichita-government/massage-business-regulations-likely-ineffective-but-will-be-onerous/ .

Brookings Metro Monitor and Wichita

A research project by The Brookings Institution illustrates the poor performance of the Wichita-area economy.

Metro Monitor from The Brookings Institution rates metropolitan areas on a number of indicators.

Brookings Metro Monitor, Wichita, Map 2016-02On the map of metropolitan areas, blue means faster growth, and orange means slowest. You can see that Wichita has the economic growth of a typical rust belt city. (Click charts for larger versions.)

Brookings Metro Monitor, Wichita, Indicators 2016-02The table showing changes in indicators over the past decade shows Wichita almost always below the middle.

Brookings Metro Monitor, Wichita, Trends 2016-02The charts of trends over time shows Wichita falling behind the nation, then catching up in 2007 and 2008, but falling behind since then. As time goes on, the gap between the nation and Wichita widens, not narrows.

These unfortunate facts about the Wichita economy are old news, if we’ve been paying attention. See, for example Employment by metropolitan area, Wichita’s growth in gross domestic product, and Wichita per capita income not moving in a good direction.

The response of Wichita political, bureaucratic, and civic leaders is, by any measure, new paint on an old barn, or just keeping pace with other cities. The Greater Wichita Partnership is just a new name for the same old collection of institutions and people who have been responsible for the dismal performance shown in Brooking’s Metro Monitor. In fact, if you visit greaterwichitapartnership.org and click on “Economic Development” you’re taken to the same old page for Greater Wichita Economic Development Coalition, although with a new logo. Same old barn; new paint.

While we have to hope that the Wichita State University Innovation Campus works as advertised, we also must realize that dozens and dozens of major and minor universities across the country already have similar initiatives up and running.

Massage business regulations likely to be ineffective, but will be onerous

The Wichita City Council is likely to create a new regulatory regime for massage businesses in response to a problem that is already addressed by strict laws.

During a presentation to the Wichita City Council on February 23, 2016, police officials reported on a number of investigations and arrests. In 2015, there were 22 arrests for human trafficking and other violations. The presentation did not include what comprised “other violations,” nor did it contain any information about the disposition of these cases.

If the city is concerned about prostitution and child trafficking, the latter being a serious crime, we already have strong laws concerning this. As far as the two crimes being related: If you are a prostitute or promoter of such, you are already a criminal, according to the law. Committing more crimes, therefore, is just another step down the path you’ve already chosen.

A solution is to bring prostitution out of the shadows. Stop making consensual behavior between adults a crime. Then police can focus on actual and serious crime, like child trafficking.

But the zeal of the Wichita City Council for creating new regulatory regime is likely to overwhelm any rational thought about the problem. Now Wichita massage business owners and therapists are likely to be saddled with onerous licensing requirements. To become a newly-licensed therapist, you must possess one of several educational credentials, one of which is 500 hours of training. Existing therapists must meet similar requirements.

City officials note that the existing local massage industry requested this regulation. That’s not surprising. The purpose of nearly all occupational licensure laws is to restrict entry to the industry so that existing practitioners can charge higher rates. That is a scam, especially against low-income people that need a masseuse or a plumber. It is also a burden to people who want to become plumbers, barbers, massage therapists, or one of the many other licensed occupations.

It is both shocking and disappointing to realize that Wichita city bureaucrats and council members do not realize these economic realities. Another economic reality is that when licensing requirements are strict, the quality of service that many people receive declines. Investigating the demand for licensed plumbers, researchers found this:1

This proxy assumes that the more stringent are the barriers the higher will be the cost of licensed service and the smaller will be its quantity. These two effects increase the motivation of consumers to substitute their own services for those of trained professionals. This substitution process should show up in rising retail sales of plumbing supplies in more tightly restrictive states since licensed plumbers will generally purchase supplies wholesale. The implicit assumption is this causal chain is that self-service is on the average of lower quality than could be obtained from even a marginally trained journeyman plumber.

When presented with a convincing but fake credential, how diligently with Wichita officials investigate?
When presented with a convincing but fake credential, how diligently with Wichita officials investigate?
In other words, when strict licensure requirements make plumbers expensive, more people do their plumbing work themselves, and this work is likely to be of lower quality. It’s quite a stretch (literally and figuratively) to apply this reasoning to do-it-yourself massage, but here’s another economic reality: The more difficult it is to achieve a credential, the greater incentive to cheat. You don’t have to search very far before you find vendors advertising their services like this:

We are one of the oldest and most trusted seller of fake diplomas on the web. We use real diploma paper, the same paper that most major universities and high schools use. We also use professional security paper for our fake transcripts. We have more than 12 years experience in printing fake diplomas. You can rest assured that your fake diploma or fake transcript will look very authentic. We offer many different types of fake diplomas and fake certificates such as, FAKE GEDs, fake college diploma, fake university degree, fake high school diploma, fake college degree, or fake high school transcripts and fake skill certificate.

How diligently will Wichita’s bureaucratic machinery investigate when presented with a fake diploma certificate and transcript? The city’s record is not good. After the city passed new taxicab regulations, somehow the regulation that prohibited convicted sex offenders from receiving licenses was not implemented effectively. The city granted a taxi driver license to a man who was on the state sex offender registry. He raped a passenger.

I urge the city council to reject these regulations and devote the city’s resources to protecting people from actual crime.


Notes

  1. Carroll, Sidney L., and Robert J. Gaston. “Occupational Restrictions and the Quality of Service Received: Some Evidence”. Southern Economic Journal 47.4 (1981): 959–976.

Reforming economic development in Wichita

In this excerpt from WichitaLiberty.TV: Can we reform economic development in Wichita to give us the growth we need? View below, or click here to view at YouTube. Originally broadcast May 10, 2015.

Continue reading Reforming economic development in Wichita

Empowering and engaging Wichitans, or not

In this excerpt from WichitaLiberty.TV: The Wichita City Manager says “we will continue to empower and engage citizens by providing information necessary to keep them informed on the actions their government is taking on their behalf.” So what actually happens when you ask the city for data, including data that many governmental agencies make freely available? View below, or click here to view at YouTube. Originally broadcast December 13, 2015.

Wichita water statistics update

The Wichita ASR water project produced little water in December. There were 31 days when river flow was adequate.

An important part of Wichita’s water supply infrastructure is the Aquifer Storage and Recovery program, or ASR. This is a program whereby water is taken from the Little Arkansas River, treated, and injected in the Equus Beds aquifer. That water is then available in the future as is other Equus Beds water.

With a cost so far of $247 million, the city believes that ASR is a proven technology that will provide water and drought protection for many years. In 2014 the city recommended that voters approve $250 million for its expansion, to be paid for by a sales tax. Voters rejected the tax in the November 2014 election.

December 2015 production

Flow of the Little Arkansas River at Valley Center. The ASR project is able to draw from the river when the flow is above 30 cfs at this measurement station.
Flow of the Little Arkansas River at Valley Center. The ASR project is able to draw from the river when the flow is above 30 cfs at this measurement station.
In December 2015, the ASR project recharged 19,138,651 gallons of water. The design capacity for ASR is 30,000,000 gallons per day, so production for the entire month of December is less than one day’s design capacity.

The ASR project is able to draw from the Little Arkansas River when the flow is above 30 cfs. As can be seen in the chart of the flow of the river, the flow was above this level every day. There were 31 days in December when there was adequate river flow for ASR to operate, counting only those days when the flow was above 30 cfs for the entire day.

ASR project background and production

According to city documents, the original capacity of the ASR phase II project to process water and pump it into the ground (the “recharge” process) was given as “Expected volume: 30 MGD for 120 days.” That translates to 3,600,000,000 (3.6 billion or 3,600 million) gallons per year. ASR phase II was completed in 2011.

Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative since July 2013.
Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative since July 2013.
At a city council workshop in April 2014, Director of Public Works and Utilities Alan King briefed the council on the history of ASR, mentioning the original belief that ASR would recharge 11,000 acre feet of water per year. But he gave a new estimate for production, telling the council that “What we’re finding is, we’re thinking we’re going to actually get 5,800 acre feet. Somewhere close to half of the original estimates.” The new estimate translates to 1,889,935,800 (1.9 billion) gallons per year.

Based on experience, the city has produced a revised estimate of ASR production capability. What has been the actual experience of ASR? The U.S. Geological Survey has ASR figures available here. I’ve gathered the data and performed an analysis. (Click charts for larger versions.)

Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR phase II, monthly
Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR phase II, monthly
I’ve produced a chart of the cumulative production of the Wichita ASR project compared with the original projections and the lower revised projections. The lines for projections rise smoothly, although it is expected that actual production is not smooth. The second phase of ASR was completed sometime in 2011, but no water was produced and recharged that year. Further, 2013 was a drought year, so to present ASR in the best possible light, I’ve prepared a chart starting in July 2013. That was when it started raining heavily, and data from USGS shows that the flow in the Little Arkansas River was much greater. Still, the ASR project is not keeping up with projections, even after goals were lowered.

On the chart of monthly production, the horizontal line represents the revised annual production projection expressed as a constant amount each month. This even rate of production is not likely, as river flow varies. In the three years that ASR phase II has been in production, that monthly target been exceeded in three months.

ASR days of flow and work through 2015-12
ASR operating efficiency through 2015-12Two nearby charts give an idea of the efficiency of operation of the ASR project. (Click charts for larger versions.) For each month, I counted how many days had a river flow above 30 cfs at every measurement for the day. (The flow is measured several dozen times a day.) If a day had all measurements above 30 cfs, I counted that as a day of adequate river flow. I then calculated the number of days of work actually accomplished using the water produced each month, the number of days of adequate river flow for the month, and the ASR design capacity.

As can be seen in the charts, the ASR project is operating far below its design goal. So far the city has not been able to provide an explanation as to why this project is not meeting its goals.

At one time the city was proud enough of the ASR project that it maintained an informative website at wichitawaterproject.org. That site no longer exists.
At one time the city was proud enough of the ASR project that it maintained an informative website at wichitawaterproject.org. That site no longer exists.

Property rights in Wichita: Your roof

The Wichita City Council will attempt to settle a dispute concerning whether a new roof should be allowed to have a vertical appearance rather than the horizontal appearance of the old.

1500 N. Park Place in Wichita, August 2015. From Google Maps. Click for larger version.
1500 N. Park Place in Wichita, August 2015. From Google Maps. Click for larger version.
Tomorrow the Wichita City Council will be asked to uphold a decision of the Historic Preservation Board (HPB) regarding the characteristics of a roof someone installed on their house. Here’s material from the agenda packet for the meeting:

Analysis: By a 4-0-1 vote, the HPB found the installation of the metal panel roof does encroach upon, damage and destroy the Park Place Fairview Historic District by installing a non-traditional roofing material and altering the horizontal pattern of the roof shingles which is a character-defining feature of the house. Secretary of the Interior’s Standards #2 and #3 specifically deal with the character of the building itself. There is no evidence in historic Sanborn Fire Insurance Maps, historic aerial photographs of the property, or historic building permit records that 1500 North Park Place ever had a metal panel or standing seam metal roof. There is no evidence of the property’s roof structure that this house ever had anything other than cedar shingles or composite singles. The issue is not with the metal material, it is with the metal sheet which gives a vertical appearance given to a roof that had a horizontal appearance. The design guidelines adopted by City Council for this historic district do not mention metal panel roofing material as appropriate material for this district (Section 2.12.1021.1 of the Wichita Code of Ordinances). The applicant did not provide an option to use metal shingles that would have the same appearance as the existing shingle roof.

Since the property is a contributing structure in the WRHP, the RHKP and the NRHP, the metal panel roof cannot proceed without the City Council finding that there are not any “feasible and prudent alternatives” to the metal panel roofing material. (Emphasis added.)

Wichita water statistics update

The Wichita ASR water project produced little water in November. There were 30 days when river flow was adequate.

An important part of Wichita’s water supply infrastructure is the Aquifer Storage and Recovery program, or ASR. This is a program whereby water is taken from the Little Arkansas River, treated, and injected in the Equus Beds aquifer. That water is then available in the future as is other Equus Beds water.

With a cost so far of $247 million, the city believes that ASR is a proven technology that will provide water and drought protection for many years. Last year the city recommended that voters approve $250 million for its expansion, to be paid for by a sales tax. Voters rejected the tax.

November 2015 production

Flow of the Little Arkansas River at Valley Center. The ASR project is able to draw from the river when the flow is above 30 cfs at this measurement station.
Flow of the Little Arkansas River at Valley Center. The ASR project is able to draw from the river when the flow is above 30 cfs at this measurement station.
In November 2015, the ASR project recharged 389,312 gallons of water. The design capacity for ASR is 30,000,000 gallons per day, so production for the entire month of November represents about one-third of a day’s capacity.

The ASR project is able to draw from the Little Arkansas River when the flow is above 30 cfs. As can be seen in the chart of the flow of the river, the flow was above this level every day. There were 30 days in November when there was adequate river flow for ASR to operate, counting only those days when the flow was above 30 cfs for the entire day.

ASR project background and production

According to city documents, the original capacity of the ASR phase II project to process water and pump it into the ground (the “recharge” process) was given as “Expected volume: 30 MGD for 120 days.” That translates to 3,600,000,000 (3.6 billion or 3,600 million) gallons per year. ASR phase II was completed in 2011.

Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative since July 2013.
Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative since July 2013.
At a city council workshop in April 2014, Director of Public Works and Utilities Alan King briefed the council on the history of ASR, mentioning the original belief that ASR would recharge 11,000 acre feet of water per year. But he gave a new estimate for production, telling the council that “What we’re finding is, we’re thinking we’re going to actually get 5,800 acre feet. Somewhere close to half of the original estimates.” The new estimate translates to 1,889,935,800 (1.9 billion) gallons per year.

Based on experience, the city has produced a revised estimate of ASR production capability. What has been the actual experience of ASR? The U.S. Geological Survey has ASR figures available here. I’ve gathered the data and performed an analysis. (Click charts for larger versions.)

Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR phase II, monthly
Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR phase II, monthly
I’ve produced a chart of the cumulative production of the Wichita ASR project compared with the original projections and the lower revised projections. The lines for projections rise smoothly, although it is expected that actual production is not smooth. The second phase of ASR was completed sometime in 2011, but no water was produced and recharged that year. Further, 2013 was a drought year, so to present ASR in the best possible light, I’ve prepared a chart starting in July 2013. That was when it started raining heavily, and data from USGS shows that the flow in the Little Arkansas River was much greater. Still, the ASR project is not keeping up with projections, even after goals were lowered.

On the chart of monthly production, the horizontal line represents the revised annual production projection expressed as a constant amount each month. This even rate of production is not likely, as river flow varies. In the three years that ASR phase II has been in production, that monthly target been exceeded in three months.

ASR days of flow and work through 2015-11
ASR operating efficiency through 2015-11Two nearby charts give an idea of the efficiency of operation of the ASR project. (Click charts for larger versions.) For each month, I counted how many days had a river flow above 30 cfs at every measurement for the day. (The flow is measured several dozen times a day.) If a day had all measurements above 30 cfs, I counted that as a day of adequate river flow. I then calculated the number of days of work actually accomplished using the water produced each month, the number of days of adequate river flow for the month, and the ASR design capacity.

As can be seen in the charts, the ASR project is operating far below its design goal. So far the city has not been able to provide an explanation as to why this project is not meeting its goals.

At one time the city was proud enough of the ASR project that it maintained an informative website at wichitawaterproject.org. That site no longer exists.
At one time the city was proud enough of the ASR project that it maintained an informative website at wichitawaterproject.org. That site no longer exists.

Wichita checkbook register

A records request to the City of Wichita results in data as well as insight into the city’s attitude towards empowering citizens with data.

I asked the City of Wichita for checkbook spending records and received data for 2015 through September 25, as I asked. I’ve made the data available in a visualization using Tableau Public. Click here to access the visualization. (A visual guide for using the visualization is at the end of this article.)

Analyzing this data requires a bit of local knowledge. For example, there is a vendor named “Visit Wichita” that started to receive monthly payments in March. What about payments for January and February? Those were made to a vendor named “Go Wichita,” which then changed its name to “Visit Wichita.”

Similarly, there are payments made to both “Westar Energy” and “Westar Energy — EDI.” These are the same entities, just as “Visit Wichita” and “Go Wichita” are the same entity. To the city’s credit, the matching pairs have the same vendor number, which is good. But resolving this requires a different level of analysis.

There are interesting entries. For example, the city usually sends a few hundred dollars per month to the Kansas Turnpike Authority. Then in July, the city paid $3.7 million to KTA. A quick search of city council agenda packets didn’t reveal any reason for this.

Of note, it looks like there were 474 checks issued in amounts $20 or less. Bank of America has estimated that the total cost of sending a business check ranges from $4 to $20.

The records request

Wichita spending data from 2013.
Wichita spending data from 2013.
The city supplied this data in an Excel spreadsheet, in an arrangement that can easily be analyzed in Excel or loaded into other programs. This is a step forward. Two years ago, Wichita could supply data of limited utility. What was supplied to me was data in pdf form, and as images, not text. It would be difficult to translate the image data into machine-readable text, and even more difficult to reorganize it to a useful arrangement or format for analysis.

Denver open checkbook.
Denver open checkbook.

I had to pay $24.00 to the city for this data. That’s a problem. It is by now routine for governmental agencies to post spending data like this, but not at the City of Wichita. When I inquired, city officials told me that the present financial management system “does not include many modern system features such as an ‘open checkbook.’” An “open checkbook” refers to a modern web interface where citizens can query for specific data and perhaps perform other analysis. An example is Denver’s open checkbook.

While the next-generation Wichita financial system will probably have such a feature, there’s no reason why citizens can’t experience some of the benefits now. The spreadsheet of spending data like that I paid for could easily be posted on the city’s website on a monthly basis. People like myself will take that data and make it more useful, as I did. There is no reason why this should not be happening.

When I learned of the fee for these records, I asked for a waiver, sending this to the city’s records official:

I’d like to ask for a waiver of the requested fee. I ask this because check register data is an example of records that many governmental agencies make freely available on their websites. The Wichita Public School District and Sedgwick County are two local examples.

I’d like to also call attention to the U.S. Freedom of Information Act, which allows for fee waivers in some circumstances: “…fee waivers are limited to situations in which a requester can show that the disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations and activities of the government and is not primarily in the commercial interest of the requester.”

I suggest that the records I am requesting will indeed “contribute significantly to public understanding of the operations and activities of the government,” and that it is in the public interest of the people of Wichita that these records be freely available.

I received an answer:

Mr. Weeks,

Your request for waiver of fees is denied. KORA allows fees to be collected prior to finding and producing the document you seek. KSA 45-218(f). The extensive statute setting out how fees are to be determined, KSA 45-219, does not contain any provision for waiver in the manner you suggest.

The City will provide the document to you upon payment as invoiced.

Sincerely,
Jay C. Hinkel,
Deputy City Attorney

Mr. Hinkel is absolutely correct. Governmental agencies in Kansas have the right to charge for records, and the Kansas statutes do not mention the waiving of fees as do the federal statutes. But the Kansas Open Records Act does not require cities to charge for providing records, especially for records that the city should already be providing. Especially when citizens are willing to take that data and make it better, at no charge to the city.

Hinkel provided a lawyer’s answer. Here, however, is the public policy the city promotes, from a Wichita city news release from 2013:

“The City Council has stressed the importance of transparency for this organization,” City Manager Robert Layton said. “We’re honored to receive a Sunny Award and we will continue to empower and engage citizens by providing information necessary to keep them informed on the actions their government is taking on their behalf.”

The importance of transparency. The city wants to empower and engage citizens by providing information. Well. I offered to “contribute significantly to public understanding of the operations and activities of the government,” but had to pay to do so.

When I asked city officials for clarification of why I had to pay to receive these records, communications staff told me: “I should note that the City has won multiple awards for openness and citizen participation, but City leaders recognize this work is never done. They strive each and every day to become more open and transparent and will continue to do so.”

I must disagree. This is not “open and transparent.” This is not how to “empower and engage” the people of Wichita. Not even close.

Wichita checkbook register visualization instructions.
Wichita checkbook register visualization instructions.

Wichita City Council, December 1, 2015

View video below, or click here to view at YouTube.

A few relevant articles from the Wichita Eagle:

Wichita city manager proposes eliminating no-bid construction projects
www.kansas.com/news/local/article1085721.html
Layton said last week that he intends to ask the City Council for a policy change against those no-bid contracts. The contracts became an issue after council members Michael O’Donnell and Pete Meitzner forced the city to take bids on the city-financed 300-stall parking garage adjacent to the privately financed Ambassador Hotel Wichita at Douglas and Broadway.

Letter from mayor at center of construction bid controversy
www.kansas.com/news/article1095572.html
Key was set to receive the garage contract in a no-bid deal from the city before O’Donnell and Pete Meitzner, supported by City Manager Robert Layton, led a revolt on the council that forced the garage project to be bid. Key ultimately was the low bidder

Eagle editorial: Appearance matters on city contracts
www.kansas.com/opinion/editorials/article1095669.html
It’s not a surprise that the prospect of Key winning the airport contract with the second-lowest bid is raising questions now, just as Key’s initial no-bid contract for the Ambassador Hotel parking garage did last year.