Kevass Harding

Ken-Mar TIF district, the bailouts

by Bob Weeks on October 3, 2011

Tomorrow the Wichita City Council handles two items regarding the Ken-Mar shopping center being redeveloped in northeast Wichita. These items illustrate how inappropriate it is for the city to serve as either entrepreneur or partner with entrepreneurs, and is another lesson in how Wichita needs pay-to-play laws.

In August 2008 the city formed a tax increment financing (TIF) district to benefit the center. This allows $2.5 million of the center’s future property taxes to be earmarked for the district’s exclusive benefit. In January 2009 the city approved a development plan that specified how the public money would be spent, and how the development would proceed.

The developer of the project is Reverend Kevass Harding, a former Wichita school board member who has announced future political ambitions.

The first and most serious issue regarding this TIF district is that changes to the development plan mean that the district will not be able to meet its debt obligations. In the sobering words of the agenda report: “The TIF financial analysis indicates that the incremental tax revenue will not cover the debt service on City TIF bonds.”

City staff is proposing to shift the debt to the city’s debt service fund, using money there to pay off the $2.5 million in temporary TIF financing bonds. Then, Ken-Mar will repay the debt service fund through the district’s incremental tax revenue over a period of 17 years, along with three percent interest.

The original development plan from 2009 includes a table that specifies an interest rate of 4.91 percent for the TIF bonds. Now the city is replacing that with its own debt, and charging Harding and Ken-Mar just three percent interest. My calculations indicate this reduced interest rate will save Harding about $30,000 per year, or about $516,000 over the course of the loan.

This action can only be characterized as a bailout, with all the negative connotations that accompany that word. It’s not the first time Wichita has had to create a bailout for a failing TIF district.

The second item the council will deal with is a change to the development plan. The development agreement from 2009 contemplates that changes will need to be made, “with the approval of City Representative from time to time.”

While the agreement doesn’t explicitly state that changes to the plan must be approved before proceeding, this is the only reasonable way to interpret the agreement.

But in this case, Harding made changes before getting approval from the city. And he didn’t just use a different paint color or different flowers in the landscaping. Instead, he made a big change. He demolished a large portion of the structure that was to be renovated, according to the plan he agreed to.

The world changes. No doubt about that. Changes to plans are necessary to accommodate changes in the world. But this is more evidence of how government is not prepared to serve as entrepreneur, or as partner with entrepreneurs.

There was an agreement in place. Harding changed it, and only several months later is the city going to grant its approval. This places the city in the position of appearing not to care whether its agreements are followed. The council finds itself in the awkward position of approving an agreement to do something that’s already been done.

(This is not an unusual position for the city, as recently it approved a letter of intent to do something for which it had yet to hold a public hearing.)

Pay-to-play lesson

Underlying the story of Ken-Mar and Reverend Harding is a lesson on the need for pay-to-play laws in Wichita and Kansas. As reported in 2009, Harding and his wife made campaign contributions to Wichita City Council Member Lavonta Williams (district 1, northeast Wichita), who is presently serving as vice-mayor. These campaign contributions, made in the maximum amount allowable, were out of character for the Hardings. They had made very few contributions to political candidates, and they appear not to have made many since then.

But in June 2008, just before the Ken-Mar TIF district was to be considered for approval, the Hardings made large contributions to Williams, who is the council member representing Ken-Mar’s district. Harding would not explain why he made the contributions. Williams offered a vague and general explanation that had no substantive meaning.

The close linkage between the contributions and Harding asking the city council to grant him money illustrates the need for pay-to-play laws in Wichita and Kansas. These laws impose various restrictions on the activities of elected officials and the awarding of contracts or other largesse to those who have made political contributions.

An example is a charter provision of the city of Santa Ana, in Orange County, California, which states: “A councilmember shall not participate in, nor use his or her official position to influence, a decision of the City Council if it is reasonably foreseeable that the decision will have a material financial effect, apart from its effect on the public generally or a significant portion thereof, on a recent major campaign contributor.”

In the absence of such laws, and with Harding and Williams unwilling to explain, we’re left with questions like these:

If the Ken-Mar TIF district served a genuine public purpose, why did the Hardings make the campaign contributions to Williams?

Must those who want to form a TIF district make contributions to the council member representing the district?

If council member Williams is accessible to her constituents, why the contributions?

Must those who receive money from the city offer a thank-you contribution?

None of these reflect well on the reputation of Wichita.

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Wichita school board: critics not welcome

by Bob Weeks on July 7, 2011

A recent meeting of the board of USD 259, the Wichita public school district, provided insight as to the insularity of the board members and district staff, and as to how little meaningful discussion or debate takes place at board meetings.

At the June 20th meeting, Dr. Walt Chappell, an elected member of the Kansas State Board of Education, used a slot on the public agenda to address the board about the upcoming budget. Chappell received a chilly reception — to say the least — from board president Connie Dietz. Chappell has been outspoken in his criticism of the way the state spends money on schools. Chappell knows, as do other critics of the Kansas school education bureaucracy, that if you’re not a team player, you’re going to suffer abuse from the education bureaucracy and its supporters.

Regardless of the validity of Chappell’s remarks to the board — more on that in another article — the attitude of Dietz is worse than simply being rude. It is shutting up your critics simply because you control the gavel. It is boorish and bullying behavior. It is contrary to good government.

The balance of power at meetings like these is all in favor of the board. Citizens, even elected officials like Chappell, may speak for a short period of time. Then board members may speak at length without fear of being held accountable for their remarks, because if the citizen were to speak even one word out of turn, the board would shut them up.

This is at a school district where much board meeting time is devoted to “feel good” measures such as the lengthy goodbye to departing board member Kevass Harding at the same meeting. That had nothing to do with public policy. It was constructive in no way except to board members, district staff, and Harding’s ego. By the way, he used the opportunity and time to announce his future political ambitions.

But when citizens and officials like Chappell speak — even though they may speak about important and weighty matters of policy — their time is strictly regulated. If they disagree with school district orthodoxy they may be scolded and lectured with no chance to defend themselves or rebut false statements and nonsensical arguments from board members or district staff. There is nothing resembling discussion or debate except among board members and district staff — all who drink from the same ideological fountain.

It’s not the first time this has happened to Chappell at the Wichita school board. Two years ago a similar incident took place. In my coverage, I wrote: “Certainly these three board members were dismissive of Chappell and his input. This is characteristic of this board and the entire district. They’re willing to accept citizen input when citizens agree with them. Otherwise, watch out.”

The district, however, believes there is debate. In a recent letter to the Wichita Eagle, board member Lynn Rogers claimed that budget decisions “are being debated heavily.”

The debate, however, is not inclusive or fruitful. Few citizens are even remotely aware of the level of school spending, whether spending is going up or down, and whether spending is related to student achievement. Last year the Kansas Policy Institute commissioned a public opinion survey that revealed just how uninformed and misinformed the citizens of Kansas are on school spending matters. National surveys have produced similar findings.

Instead, the debates about policies and budgets take place largely among those who benefit from school spending and increases. And, of course, in the one-sided lectures from the school board bench. Rogers called Chappell’s facts “misleading” despite the fact that the supporting documentation comes from the district itself and the state department of education.

This is not the first time that members like Rogers have revealed just how out of touch they are with the concerns of citizens and how misinformed they can be. For example, he told me during a meeting that responding to requests for information is a burden that prevents the district from educating kids.

In another instance, Rogers said “I know there are kids from many Catholic schools that have come to public schools when the Catholic schools have kicked them out.” It turns out that the Wichita Catholic schools expel very few students, less than five per year on average.

Diversity? It’s a sought-after goal of the district. In fact, the district has a committee with the title “Diversity, Equity and Accountability Committee.” But diversity in thought and opinion must not be part of what’s desired. The belligerent and disrespectful behavior of board members, particularly president Connie Dietz, is a deterrent to parents, teachers, students, and citizens who want to be involved and have their voices heard. That is, unless they agree with and praise the board and district.

Without the involvement of everyone, the board and district make decisions without all relevant facts and input, and often with incorrect information about many vitally important matters. That, I believe, is they way they like it.

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At last night’s meeting of the board of USD 259, the Wichita public school district, citizens learned that the process used to select the vendor for artificial athletic fields was flawed and violated Kansas law. The district will start over, almost from the beginning, and use a competitive bidding process to select the firm to install the fields at five high schools. The result is that the fields will not be available for the coming football season.

Interim Superintendent Martin Libhart announced that a hearing committee had been working all day, and that its recommendation was to reject and revoke the award of bid to Hellas Construction, and the the project should be put out for competitive bid.

During time for citizen comment, speakers mentioned that the board promised that the bond money would stay local and the hope that taxes would be spent wisely.

The president of Hellas Construction spoke and thought that the bid process was very thorough. He believes that the proposal process had been commingled with a competitive bid process, and that leads to the question as to whether anyone but the second-low bidder has standing to challenge the process.

Board member Kevass Harding asked whether the process — 400 hours of time plus travel expenses — was wrong? Board counsel Tom Powell said the process was thorough. The question, he said, was whether the Kansas bid law applied in this situation. The decision of the committee was that we couldn’t come to a conclusion as to what had been done complied with the bid law.

Board member Connie Dietz asked why this process must be a competitive bid rather than a request for proposal. After a follow-up question, Powell said that this process should have been a competitive bid.

Dietz asked what happens to the timeline, if we support the committee? The district had wanted to have the field in place for the fall, but now that goal is not achievable.

She also asked what happens if the board stands by its previous decision? Powell answered “we’ll go to court.”

After an executive session of about 30 minutes and a few additional questions, board member Barb Fuller moved that the bid be revoked and the turf fields be put out for competitive bid.

Board member Lanora Nolan warned against “buying the cheap.” She said her greatest frustration is when “adult” issues get in the way of what’s best for kids. She also noted that none of the citizens who spoke to the board on this matter mentioned what’s best for kids. That’s heartbreaking, she said, to talk about taxpayer money and not what’s best for kids.

The motion passed unanimously.

After the meeting, citizen John Todd said “How is it that you [USD 259] can break the law — violating a state statute — and anyone that advocates for the taxpayer get criticized because they’re against children.”

It is now apparent that the process of acquiring these turf fields was flawed from the start. Somehow, the district started an expensive selection process that is contrary to what is now apparent the law requires, according to Powell’s interpretation. 400 hours of time plus travel expenses (my request for these expense records is being fulfilled) is now largely wasted, although some of the experience gained will be used in writing the specifications for the bid process.

Also, a season will go by without new artificial athletic fields.

If the board wants to assess blame, it should investigate who it was that authorized this expensive and flawed process. In particular, was the process approved by the district’s legal counsel, either internal or external?

Certainly the district has legal staff at its disposal. Last year during the bond issue campaign the district’s lawyers had time enough to threaten to sue a citizen group because the apple they used was similar to the apple the district uses in its logo.

If the district has the legal resources to harass citizen groups about the use of a generic apple logo, why can’t they get these big things right?

The Wichita school district talks about accountability. Here’s a chance to show that they actually mean it. Investigate and find who is responsible for this.

Coverage from the Wichita Eagle is at Wichita district nixes turf builder’s contract.

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More unlikely Lavonta Williams voters

by Bob Weeks on March 31, 2009

I don’t want to emphasize this too much, as these cases are not in the same league as listing an endorsement from a dead man (Wichita political endorsements from the other side and Campaign mailer listed endorsement from dead man ).

But for completeness — possibly, who knows — here’s the rundown on a few more people who are listed on Lavonta Williams’ campaign literature under the heading “Join us in voting WILLIAMS on April 7:”

Elder Herman Hicks. He lives in Derby.

Reverend Kevass Harding. He lives in Bel Aire, outside the Wichita city limits. But he works at a church in district 1, and is involved in Wichita taxpayer-subsidized real estate development there, too. But he can’t vote in district 1.

Brother Clifford Easiley. He lives in precinct 224, in city council district 2. (It’s spelled “Easily” on the mail piece.)

Reverend Lincoln Montgomery. He lives in precinct 218 in the exclusive Willowbend neighborhood. That’s a long way, figuratively, from the inner-city church he serves in district 1.

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KenMar Shopping Center, Funded by Righteousness

by Bob Weeks on March 4, 2009

Can the Lord’s work be funded by taxation? If you’re Reverend Kevass Harding, the answer is sure, why not? He might even think it’s his calling.

Never mind that at its fundamental level, taxation takes money from one person against their will and gives it to another.

Sure, some people will argue that taxes are “the price we pay for civilization” or something like that. Or they will say that since we all benefit from, say, police and fire protection, we all have to pay taxes.

Even if true, these rationalizations are a long way from using taxation to support private real estate development. At least these arguments don’t invoke the name of Jesus. But Harding does in order to accomplish through government, in the form of tax increment financing, what he couldn’t through voluntary action. Is this what Jesus would do?

The Wichita Eagle story KenMar part of pastor’s work in neighborhood tells us of Harding’s belief that “he is doing the Lord’s work, in part, in renovating the run-down KenMar Shopping Center at 13th and Oliver.”

The story also states “The project is a private, for-profit venture, he said, but it springs in part from his spiritual vocation.”

This taking of money, shrouded in morality and spirituality, is even more egregious than most. High atop his moral high horse, Harding believes he is doing good for the community. For the entire city, I’m sure he believes.

Here’s something from another man of religion, C.S. Lewis, reminding us about moral busybodies: “Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.”

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Proposition K and TIF Districts Collide

by Bob Weeks on February 18, 2009

A recent story in the Wichita Eagle by Dion Lefler (Tax plan could leave city with TIF debt) illustrates the some of the problems that can happen with complex economic development efforts.

The problem in this case lies in the interaction of Proposition K, an effort to reform property tax appraisals in Kansas, and tax increment financing, or TIF districts.

The idea behind TIF districts is that as property is developed, its value will rise enough that the increased property taxes will pay off bonds that the city issued to benefit the developer.

Proposition K, however, alters the way that appraised values rise. According to the Eagle’s analysis of the TIF district benefiting the Ken-Mar shopping center, under Proposition K this district will generate $4.3 million less than what is needed to pay off the bonds.

So what would the city do if faced with this shortfall? The Eagle article suggests “The city could cut spending elsewhere or raise the mill levy to fill the gap.”

That would be a huge windfall to the developer of this project, which is Wichita school board member and Methodist minister Kevass Harding.

But not so fast. The city requires beneficiaries of TIF financing to make up any difference between tax revenues and what’s needed to pay off the bonds. So it appears that the taxpayers may not be on the hook, after all.

The difference, I believe, is that the debt owed to the city would simply be an obligation of Harding and his ownership team. It’s only as good as their ability and willingness to pay. Without Proposition K, the monies needed to pay the bonds would be in the form of property taxes, and the city could take various measures to collect that wouldn’t be available otherwise.

Isn’t this a fine mess? Last summer when this TIF district was being considered, I wondered out loud to the city council “Why don’t we strip away all the confusion and obfuscation surrounding TIF districts and just give the developers $2.5 million?” (See Reverend Kevass Harding’s Wichita TIF District: A Bad Deal in Several Ways.)

I didn’t know then that the confusion and obfuscation would get worse.

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From Kevass Harding to Lavonta Williams

by Bob Weeks on February 3, 2009

One of the unusual sightings on the campaign finance report filed last month by Lavonta Williams, current Wichita city council member and candidate for re-election, is two contributions totaling $1,000 from Kevass Harding and his wife. These contributions represent the maximum it was possible for two people to give at the time.

These contributions are unusual in that the Hardings don’t show up very often on the lists of contributors to local politicians. On May 20, 2008, Kevass Harding contributed $250 to Donald Betts, Jr. in his campaign for the U.S. House of Representatives. Then on November 24, 2008, Teketa Harding contributed $50 to Kansas House candidate Cheryl McFarthing.

So the Hardings do contribute a little bit now and then. But the $1,000 to council member Williams represents a new step forward for the Hardings.

I have a theory as to why the Hardings made these contributions, but it will have to remain just that, as none of the parties have answered direct questions about this contribution. All that we know for certain is that these contributions were made last June, right before Harding’s application for the Ken-Mar TIF district went before the Wichita city council, of which Lavonta Williams is a member, in July and August.

I’ve asked both parties to explain whether there was or was not a connection between the contributions and the application for the TIF district. Williams answered the question obliquely, not addressing the questions that Wichitans want the answer to (see Lavonta Williams Campaign Contributions Raise a Few Questions). Harding didn’t respond to email or telephone inquiries. But that’s not surprising, as last summer he wouldn’t return my telephone calls. That’s even though I am his constituent, as he is the at-large member of the Wichita school board.

So we’re left to wonder.

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Remarks to be delivered to the Wichita City Council on January 6, 2009.

Mr. Mayor, members of the council:

Last month it was discovered that procedures used to investigate the background of potential city business partners were lacking in some respects. It is now recognized that the process that were in place failed to give city council members information that they needed in order to make a fully-informed decision about the desirability of partnering with a certain development firm.

Today the council is facing a similar situation. As with the previous case, the TIF district itself has already been approved. Now the actual project plan is before you.

Also as with the case last month, these developers made application under the vetting process that this council has now realized was faulty.

To my knowledge, no one has made any allegations that the developers before you today have problems like those that caused the postponement of the project in December. But since these developers applied for and were approved for TIF financing under a system that is now recognized as flawed, we really don’t know.

There is one thing in particular I would like to know: The developers have been asked to agree to what the city calls a “Tax Increment Shortfall Guaranty.” It seems to me that this guaranty is only as good as the financial condition of the guarantor. Has the city examined financial statements of Reverend Harding and his partners, in order to determine whether they have the financial capacity to make good on this commitment, if it becomes necessary?

I think the citizens of Wichita would sleep better at night if these developers would go through the new qualification process that the city is preparing. It’s been reported that this new process will be ready soon. Mr. Mayor, why don’t we wait a month or two and investigate these developers under the new process that is presently being developed? Then the citizens of Wichita can have confidence in this council and the project the taxpayers have been asked to subsidize.

Mr. Mayor and members of the council, there’s another issue that I’d like to call your attention to. That’s the possibility that the city or county — perhaps both — might decide to raise their sales tax rates in exchange for lowering the property tax mill levy. If that were to happen, what would be the impact on TIF districts? The assumptions used in the projection for this TIF district assume that the mill levy in future years is the same as it is today. But if either the city or county were to reduce or eliminate its mill levy, it seems that this — and other — TIF districts would not generate enough property tax to service their debt.

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Records Requests Sent Today

by Bob Weeks on September 15, 2008

Today, I’ve made two records requests under the Kansas Open Records Act.

The first, to USD 259, the Wichita public school district, is this:

All correspondence between USD 259 and Schaefer Johnson Cox Frey Architecture and its representatives from July 1, 2007 to the present. I ask for both written and electronic correspondence such as email. This would include email between USD 259 and Schaefer Johnson Cox Frey Architecture’s email accounts at sjcf.com, and also email accounts of Schaefer Johnson Cox Frey Architecture representatives such as Joe Johnson, Kenton Cox, and Ken Arnold that may not be at an sjcf.com email address.

Then, to the City of Wichita:

All correspondence between the City of Wichita and HH Holdings, LLC and its representatives from January 1, 2007 to the present. I ask for both written and electronic correspondence such as email. This would include email between the City of Wichita and Kevass Harding at both business and personal email addresses, between the City of Wichita and Key Construction and its representatives at both business and personal email addresses, and between the City of Wichita and Landmark Commercial Real Estate at both business and personal email addresses.

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Wichita School District: TIF Action Tests Accountability and Ethics

September 8, 2008

The real problem with this TIF district, however, is the conduct of the applicant, who is a member of this board.

At a meeting of the Wichita City Council, Reverend Harding told the council that he had informed his fellow school board members of what he was doing. But two members of this board have told me personally that he did not do that. So there’s a discrepancy somewhere.

Then, I am Reverend Harding’s constituent. He has not responded to my several email and telephone messages with questions about this project.

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Being Open and Transparent: A Sedgwick County Commissioner’s View

August 28, 2008

Yesterday (August 27, 2008) I testified briefly at a meeting of the Sedgwick County Commission opposing the formation of a tax increment financing (TIF) district that will benefit a Wichita political insider. My concern that I wanted the commissioners to be aware of is was that the applicant, Wichita school board member Reverend Kevass Harding, [...]

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Will George Fahnestock Vote For the Wichita School Bond Issue?

August 21, 2008

Wichita’s mysterious “Boondoggler” posted today that George Fahnestock, the businessman selected to lead the campaign for the proposed bond issue for USD 259, the Wichita public schools, doesn’t live in the Wichita school district. The post is Fahnestock’s Motivation? A map of his house, along with school district boundaries, may be viewed here. Earlier this [...]

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Wichita’s Naysayers Shortchanged in Council’s Record

August 20, 2008

On August 12, 2008, the Wichita City Council considered the establishment of a TIF district that would benefit Reverend Kevass Harding and his real estate development team. At the council meeting Reverend Harding spoke, and then John Todd spoke, and then myself. We all spoke for, I would guess, roughly the same amount of time. [...]

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Wichita Mayor Carl Brewer, August 12, 2008

August 13, 2008

Update: some commentary about these remarks may be read here: Wichita Mayor Carl Brewer Saves Us From Covered Wagons. Wichita Mayor Carl Brewer delivered these remarks after John Todd and I testified against the creation of a tax increment financing (TIF) district benefiting Wichita minister Kevass Harding. My remarks can be read here: Reverend Kevass [...]

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Reverend Kevass Harding’s Wichita TIF District: A Bad Deal in Several Ways

August 12, 2008

Remarks to be delivered to the Wichita City Council on August 12, 2008. There’s several reasons why this council should not approve this request for TIF financing. Material in today’s agenda packet doesn’t specify an amount, but past materials indicated that the project was $2.5 million short of the total needed for the project. Now [...]

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Questions Wichita Reverend Kevass Harding Will Not Answer

August 7, 2008

The Reverend Kevass Harding, a member of the board of USD 259, the Wichita public school district, is also a real estate developer (New life for Ken-Mar Shopping Center: Harding plans to revitalize 13th Street mall, March 14, 2008 Wichita Business Journal). The problem is that Harding plans to ask the taxpayers of the City [...]

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Wichita City Council’s misunderstanding of tax increment financing

July 23, 2008

On July 8, 2008 I testified at a public hearing at a Wichita city council meeting. Afterward, a council member told me that I had a “glaring error” in my arguments. I won’t identify this member in order to avoid embarrassing the member. The minutes of the meeting don’t identify the member who said this, [...]

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Reverend Kevass Harding and His Wichita TIF District

July 8, 2008

Remarks to be delivered to the Wichita City Council, July 8, 2008. Mr. Mayor and members of the council, today I will not discuss the desirability of tax increment financing (TIF) districts in general, or the merits of this one in particular. I’ll leave that for the August 12 public hearing. Instead, I wish to [...]

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Distaste for tax increases faded quickly on Wichita school board

March 12, 2008

The election took place in April 2007. In August 2007, just four months later, all Wichita school board members, including those mentioned above, voted to increase taxes. It didn’t take long for Kevass Harding to reverse his position. It didn’t take long for Barb Fuller to overcome her dislike for raising taxes. Power has a way of doing these things.

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