From the Wichita Pachyderm Club this week: Wichita city council candidates from districts 4 and 5. This audio presentation or podcast was recorded on September 20, 2019. Todd Johnson is the moderator.
Despite heavy promotion and investment in downtown Wichita, the number of jobs continues to decline.
The United States Census Bureau has a program known as LEHD Origin-Destination Employment Statistics, or LODES. According to the Bureau, “The LEHD program produces new, cost effective, public-use information combining federal, state and Census Bureau data on employers and employees under the Local Employment Dynamics (LED) Partnership. State and local authorities increasingly need detailed local information about their economies to make informed decisions. The LED Partnership works to fill critical data gaps and provide indicators needed by state and local authorities.”
Data is available by zipcode. This allows isolation of downtown Wichita, which usually recognized as zip code 67202. Data was released at the end of August for calendar year 2017.
What does the data tell us about downtown Wichita? As can be seen in the nearby chart, the trend in jobs is down, and down almost every year. Most notably, the number of private sector jobs has declined by 28.6 percent since 2002. (Click charts for larger versions.)
Since 2010, about the time Wichita started more aggressive promotion of downtown, the number of private sector jobs has fallen by 9.4 percent.
Of note, for the three age groups this data tracks, the jobs in group “age 55 or over” is growing, although it is numerically the smallest group.
The City of Wichita and the Wichita Metropolitan Statistical Area are not doing well. According to the same data set, the rate of job growth has been declining since 2012, and was near zero or negative for 2016 and 2017.
For more information on this data, and to access the interactive visualization of this data, see Visualization: Downtown Wichita jobs.
Because of the public policy aspect of this data, I asked both candidates for Wichita Mayor for a response. Wichita Mayor Jeff Longwell did not respond to repeated requests. Challenger Brandon Whipple provided this by email:
Under current city leadership, our sister cities are all growing at a higher rate economically than Wichita. Wichita’s recent job growth is at .5%, compared to Oklahoma City at 3.4%, Omaha, NE at 1.9% and the national average at 1.6%. The current Mayor brags that our unemployment rate is at 3.9%, but that’s the same as the national average, which means it’s nothing to brag about. Omaha, Tulsa, Oklahoma City and Des Moines all have lower unemployment than Wichita and the national average.
Wichita has competed and beat our sister cities in the past economically. We need leaders who are not afraid to compare Wichita not only to our past, but also to other mid-size cities and have the vision to again become an economic leader among them. There is no silver bullet but the first step towards economic growth is recognizing we have room to grow.
Also we’re not gaining jobs, we’re losing people. That’s nothing to brag about.
For the two institutions planning and developing policy for downtown, the city’s public information office did not respond. Jaimie Garnett, Executive Vice President of Strategic Communications, Greater Wichita Partnership provided this:
Based on how the Census Bureau collects LEHD data it can be difficult to get a true comparison of year-to-year numbers especially in smaller geographic areas. Our understanding is that how a company reports its workers can vary and that the Census Bureau gives data in each category what they call a “noise infusion” to protect individual firms’ confidentiality. When we have talked with economic groups such as WSU’s CEDBR, they consider the LEHD data the best data available while also recognizing these issues.
We’re excited about many recent Wichita area announcements from downtown to the region. For downtown Wichita, we’re pleased by the fact that the private sector made 90 percent of the investment in 2018 and over the past 10 years, the private sector made 77 percent of the investment. In addition, downtown is experiencing corporate investment and there are companies relocating to the core.
While these concerns about LEHD data are valid, I don’t believe they explain the long-term trend. Additionally, both the city, its agencies, and WSU’s CEBDR have made gross errors in using LEHD data. 1 2
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Notes
Details of the Wichita baseball stadium land deal were an issue at the first Wichita mayoral debate.
The Wichita first mayoral debate of the general election season between Wichita Mayor Jeff Longwell and Brandon Whipple was characterized by the Wichita Eagle headline, “Wichita mayor candidates accuse each other of lying in first debate.” But I noticed a story told by the mayor that sounds like a good deal, but deserves scrutiny.
It has to do with the four acres of land sold for $1 per acre to the owners of the new Wichita baseball team. The controversy is that the fact of the sale was not known by the public until shortly before the council was asked to approve the deal. As reported by the Wichita Eagle:
The City Council sold four acres of public land for $1 an acre in a deal where some city staff members acknowledged they didn’t follow city guidelines for selling city property.
“We can always communicate better,” Longwell said. “Certainly, it was a learning opportunity for many of those at City Hall that had been working on that bill for a long time.
“But let me tell you what really didn’t get reported. The previous stadium had a contract where the team paid us $25,000 a year to play there. The new team is going to be paying us up to $600,000 a year. I’ll negotiate four acres away every day for $600,000 every year that we can put into the Wichita city coffers and all of the growth that it’s going to bring that river corridor.
“So at the end of the day, what people are not arguing is how good the deal is. They’re just complaining about the communications, and we can improve that.” 1
Let’s look at “how good the deal is.” The money Longwell referenced is called a “management fee.” More commonly, a payment like this is called “rent.” It’s paid to the city by the new baseball team annually. Here’s the contract language: “Beginning with the first year of the Initial Term, the Team will pay annual fees of Three Hundred Fifty Thousand Dollars ($350,000) per year, with an increase to be determined every five years based on the average increase in the Consumer Price Index for All Urban Consumers over the previous five years.” 2
I’m not sure how to model the calculation described in this agreement, but one attempt showed that inflation would have to be nearly four percent per year in order to reach an annual payment of $600,000 at the time of last adjustment. For reference, the average inflation rate for the last ten years is about 1.6 percent.
But the inflation rate doesn’t really matter, as the purpose of a payment that increases with inflation is so that its value remains constant in real dollars. So whatever the annual management fee years from now, it should be worth, in real terms, its value today, which is $350,000.
Click for larger.Then: No matter what the management fee paid by the new team, some of it goes to the Wingnuts, the old team. Nearby is a table from the agreement between the city and the Wingnuts. 3 The $2,200,000 the city needs to pay is more than the first six years of management fees the new team will pay.
One more thing: In order the get these management fees, the city had to build a stadium costing some $75 million. The management fees, after the Wingnuts are paid off, represent a rate of return of one-half of one percent.
The mayor mentioned that a benefit would be “all of the growth that it’s going to bring that river corridor.” For now, that growth exists as plans only. I hope the river corridor is a commercial success, but the city’s experience in development is mixed.
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Notes
Wichita city hall again places a controversial matter on the consent agenda, where it might pass without notice.
Should the City of Wichita lease part of a new park to a private entity for its exclusive use? That’s what the Wichita City Council will consider this week. But there are issues apart from the lease itself.
The subject of the item this week is Naftzger Park in downtown Wichita. The new building on the east side of the park has ground floor retail space, including a restaurant. To have an outdoor patio area in which alcohol is served, the restaurant’s patio must be fenced in. Furthermore, the proposed patio sits on park land, which requires execution of a lease.
The problem is that plans for the fenced patio were not known by the mayor, the city council, or the public until last week when the city council agenda for its September 10, 2019 meeting was released.
Not only that, the item was placed on the consent agenda. That’s a section of the meeting where a number of agenda items are considered and voted on in bulk without discussion, unless a council member asks to “pull” an item. The consent agenda usually holds non-controversial items.
But the redesign of Naftzger Park has been controversial. There was much community discussion about the design, and not everyone was happy. The park and the surrounding development have received millions in taxpayer subsidy, which adds to the controversy.
So it’s surprising that anything involving this park would be handled on a consent agenda. But in February the council considered an error in the park design, correction of which cost $115,000. That was passed on the consent agenda with no discussion.
The city has had other trouble with its consent agenda. This summer the lease of airport land to a hotel developer was placed on the consent agenda. The lease was found to have errors and the matter was delayed twice.
According to the minutes of the July 16 council meeting, Mayor Longwell referenced “a mistake made by staff to put this on consent agenda without the knowledge of any Council Member.”
On the same matter, the Wichita Eagle reported: “‘We really don’t like, in this case, last-second changes that are brought to us,’ Longwell said. ‘And it’s not fair to the community to have last-second changes presented to the council and then ask us to vote on it.’” A few days later the newspaper reported, “On Friday, Longwell said he plans to ask the council to change its policies so “every negotiated agreement goes on a regular agenda, not consent.”
Someone didn’t get the message, it seems.
Should the city lease part of Naftzger Park for exclusive private use? That’s an issue worthy of discussion. But two things are certain:
Any lease should have been part of the original discussion on the redesign of Naftzger Park two years ago.
And, stuff like this shouldn’t be on the consent agenda.
Wichita spending data presented as a summary, and as a list.
As part of an ongoing transparency project, I asked the City of Wichita for check register data. I’ve made the data available in a visualization using Tableau Public. This visualization is updated with data through August 13, 2019.
Of note, the city does not make this data available on its website.
To learn more about this data and use the visualization, click here.
From the Wichita Pachyderm Club this week: Wichita Police Chief Gordon Ramsay. This audio presentation was recorded on August 16, 2019.
Here are an interactive map and table of results of the Wichita mayoral primary election, August 6, 2019. Click here to access.
The City of Wichita and Mayor Jeff Longwell shouldn’t be using flimsy evidence that is contrary to actual economic data.
Earlier this year Wichita city officials promoted an article that praised the Wichita economy. 1 A tweet came from the official @CityofWichita Twitter account and reads “We have been named one of the top two recession-proof cities in the nation by @Livability. Wichita was praised for its ability to withstand turbulence in the national economy, steady job growth and the state’s low income-to-debt ratio.” 2
Now Wichita Mayor Jeff Longwell is using this in his campaign to be reelected mayor.
The problem is that this claim of Wichita being recession-proof isn’t true. I explain in more detail in Wichita, a recession-proof city.
Here are two charts of actual economic data. The first chart shows the change in real gross domestic product for the Wichita metropolitan statistical area and the nation.
Notice that since the Great Recession ended in 2009, there have been three separate years in which Wichita GDP declined. Since a recession is defined as a period of declining GDP, Wichita is obviously not recession-proof.
As for the “ability to withstand turbulence in the national economy,” these three years of shrinking Wichita GDP were years when the national economy expanded.
As for “steady job growth,” here is a chart of annual job growth for the Wichita metropolitan statistical area and the nation.
Since the end of the Great Recession, there have been two years in which Wichita lost jobs while the nation was gaining jobs. This happened most recently in 2017, while Longwell was mayor. Since the end of the Great Recession, Wichita has created jobs at a much slower pace than the nation. Wichita has been doing better last year and this year, although recent months have shown a loss of jobs. 3
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Notes
Mistakes on Wichita Mayor Jeff Longwell’s Facebook campaign page are troubling.
On the Facebook campaign page for Wichita Mayor Jeff Longwell, we can read this in the “About” section:
“Since 2015, Mayor Longwell has boldly lead Wichita into it’s bright, better future. Undeterred by status quo or fear of change, he’s helped poise Wichita to grab its limitless opportunity and prepare to take its place among the top cities in America.” 1
I see three errors or mistakes. First, an explanation from Professor Paul Brians:
lead / led
When you’re hit over the head, the instrument could be a “lead” pipe. But when it’s a verb, “lead” is the present and “led” is the past tense. The problem is that the past tense is pronounced exactly like the above-mentioned plumbing material (“plumb” comes from a word meaning “lead”), so people confuse the two. In a sentence like “She led us to the scene of the crime,” always use the three-letter spelling. 2
Then, an everyday error along with two correct uses of the same word:
Its, without an apostrophe, is the possessive of the pronoun it. It’s, with an apostrophe, is a contraction of it is or it has. If you’re not sure which spelling to use, try replacing it with it is or it has. If neither of those phrases works in its place, then its is the word you’re looking for. 3
Finally, poise is used in an incorrect, or at least uncommon, way. A better word would be positioned, as in he’s helped positioned Wichita.
(It had been worse. At one time this Facebook page said Longwell was elected mayor in 2014. 4 That was fixed after someone called attention to it.)
Is this important? Absolutely. Either the mayor or his campaign surrogates made several mistakes in the basic use of language, mistakes that we expect high school students to recognize.
Errors like these that stand for months indicate carelessness. Didn’t the mayor or someone with the campaign proofread this paragraph? Were they not capable of recognizing these mistakes? Didn’t any of the mayor’s supporters call attention to this?
Isn’t anyone worried about the impression of Wichita this creates?
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Notes