Voice For Liberty

Category: Wichita city government

  • Freestanding emergency room in Wichita closes

    Freestanding emergency room in Wichita closes

    The conversion of a medical facility should receive city scrutiny due to tax breaks granted based on its original use.

    The Wichita Eagle reports that a freestanding emergency room in northeast Wichita has closed after two years. It will be converted to a cardiology office under the same ownership.

    As I reported in Free standing emergency department about to open in Wichita, the facility received property tax abatements worth an estimated $61,882 per year in the first year. The abatement was scheduled to last for five years, with a likely extension for an additional five years. These abatements were obtained through the use of the industrial revenue bonds program.

    The emergency room, also called a freestanding emergency department, qualified for tax abatements under a city policy that “requires medical facilities to attract at least 30% of patients from outside the Wichita MSA.” It is not known whether the shift from an emergency department to a cardiology office will meet this requirement.

    Further, the ordinance the council passed refers specifically to “an emergency medical facility,” not a cardiology office.

    These two significant changes ought to, at minimum, be brought to the attention of the Wichita City Council.

    Also reported in Free standing emergency department about to open in Wichita, treatment in these emergency departments is expensive. While I do not have information on this specific ED, UnitedHealth Group found this in its analysis of freestanding emergency departments: “FSEDs largely treat non-emergent conditions: 2.3 percent of FSED visits in the U.S. are emergent or immediate and require services unique to an ED.” Also, “In Texas, the average cost of treating common conditions at an FSED ($3,217) is 22 times more than at a physician office ($146) and 19 times more than at an urgent care center ($167).” UnitedHealth Group is a large insurer.

  • Wichita city council to consider COVID-19 response measures

    Wichita city council to consider COVID-19 response measures

    The City of Wichita may spend to create a COVID-19 expense tracking project and to bypass normal purchasing processes.

    At Tuesday’s meeting of the Wichita City Council, members will consider measures to help the city respond to the COVID-19 pandemic.

    In the agenda packet for the meeting, the city advises that the pandemic will financially impact the city, and that the city needs to take steps to respond.

    According to the city document, the city may experience extra costs and revenue shortfalls. There is the potential for the city to be compensated for these if the city can “aggregate and track relevant costs.” The city proposes a project with an initial budget of one million dollars to accomplish this. A proposed ordinance authorizes issuing general obligation bonds to provide funding.

    Also, a proposed ordinance authorizes the city manager to bypass the regular city purchasing process. That, according to city code, requires public bidding for purchases over $50,000. The proposed ordinance authorizes the manager to use the “public exigency” exception. The ordinance also authorizes the manager to make necessary budget adjustments to this regard. Also, a person may be designated as the city’s authorized representative when dealing with federal or state agencies.

    The city’s response to the pandemic has generated controversy among members of the city council. The Wichita Eagle has reported on this in the news stories Wichita mayor Whipple, council clash on proposal to aid workers idled by coronavirus and Wichita City Council fracas over workers furloughed during coronavirus turns ugly.

  • At Naftzger Park: ‘Sunflower Exclusive’

    At Naftzger Park: ‘Sunflower Exclusive’

    Dr. Chinyere Grace Okafor, poet, playwright and fiction writer, “is a Professor of English and Women’s Studies, Director of the Center for Women’s Studies and Chair of the Department of Women’s Studies and Religion, Wichita State University.” She has contributed a poem that is featured in the redesigned Naftzger Park in downtown Wichita.

    Chase Billingham visited the park and transcribed the poem. He reports: “This is the poem that has been carved into stone pavers in the new Naftzger Park. The poem appears twice in the park. It appears in its entirety in one large slab near Douglas Avenue. And the first few stanzas appear in larger print in stones that line the park’s lawn. I have transcribed the poem exactly as it appears — carved in stone — in the park (including, for example, the repeated use of the word “-nd”).”

    Sunflower Exclusive

    By Chinyere G. Okafor

    Fans make brief stops at Naftzger Park

    Salute Clinton Naftzger and Carry Nation

    Folks that did their work for this Park

    At the heart of our Shocker Nation.

    We salute colors and creeds of the globe

    Rainbow signs and heart of the Air Capital

    Where choral birds and metal birds waltz

    Skip and jump to the music of sunflower

    Arkansas River constructs the message

    The Prairie manufactures gifts of love

    Wrapped in sundry waves of grandeur

    Acclaimed by all as beloved of our land

    Sunflower knows naught the plough

    Name and hand that works the prairie

    This beauty snores but rises with spring

    For now day begins when you wake up

    You too, me too, like sleeping black bears

    Must wake up and rise up after our winter

    And with bold eyes face the blue sun of reality

    In the productive -nd laid-back home of liberty

    Breezy, windy, witty Wichita

    Where prosperity kisses reality

    Get-go-confronts the kitchen table

    And therapy comforts fragility

    Wide country stretches eyes to domain of memory

    Where landscape of imagination waters contemplation

    Earth, sky, and all deliver top of the line conditions

    Boast of twist -nd tornado that torpedo foundation

    Not what we have but how we love is what they remember

    Lives we touch not the bank account is what they remember

    For the ultimate within compels the fellowship marshal

    Smile of your hands -nd complete oneness of our circle

    Your bloody face and eyes like mine

    Fabulously human and whole not digital

    With legs that waltz the grace of love

    Shall drink from the cup of Wide Country

    When summer heat and River fest

    Rain, hail, slush and all of winter

    Where Santa, Silent Night and Snow

    Strive to rouse our snoozing vivacity

    Sparrow shall call the bell of liberty

    And beckon all to cookout at festival

    Where babe, pet and pal shake hands

    -Nd celebrate the blue sun of Wichita

    Cottonwood canopy spreads its wings

    Welcomes the crane and fish crow alike

    To halls and even basement of its groves

    So is our park with peace and open doors

    You may judge my stance as hopeless

    The one in some kind of freaky ditch

    Know that my time is mine and I rise!

    With my Chi or Angel planted by my God

    See processions of fish birds in the sky

    They do not disturb the pelican parade

    Or challenge globe trotting metal birds

    For the figure of liberty is clarion of all

    Arise fellows of this grumbling fest of life

    For our yesterday forever ended last night

    Seize our bill of right to the extraordinary

    I am special -nd shaped to be exceptional

  • Missing from Wichita city documents: Sales tax

    Missing from Wichita city documents: Sales tax

    It would be simple for the City of Wichita to include additional relevant information regarding economic development incentive decisions.

    When the Wichita City Council makes decisions regarding economic development incentives, the Center for Economic Development and Business Research at Wichita State University prepares an analysis for the city. The purpose of the analysis is to determine benefit-cost ratios for overlapping governmental jurisdictions, purporting to show that these jurisdictions will receive more in benefits than they pay in costs. An example of the analysis for a large project is here.

    The city does not make this analysis document available to the public. It is a public record, though. Every time I have asked, they have been provided.

    One thing, then, that the city could do to increase transparency is to simply make these analysis documents available. Perhaps not in the agenda packet, but as a supplement, such as the way the city provides Powerpoint presentations for council meetings.

    Another thing the city could do is to include relevant data that would take just a little more effort.

    Consider sales tax exemptions. For a recent industrial revenue bond decision, city documents stated: “The project will also qualify for a sales tax exemption on bond-financed purchases.” 1 But the document doesn’t state the dollar value of the sales tax exemption, even though the CEDBR analysis includes this number. 2 That value, for this recent project, is $1,111,264.

    Is that information relevant to decision-makers? City documents estimate the value of the property tax abatements in the first year as $773,604. So for the total tax forgiveness received in the first year, the sales tax exemption is larger than the property tax abatement, accounting for 59.0 percent of the total. 3 That is relevant.

    Even over the ten-year life of the property tax abatement, the sales tax exemption is still 11.8 percent of the total tax forgiveness. That — the duration of the property tax abatement — is another opportunity to increase transparency. The CEDBR analysis gives the total cost of the incentives for ten years. (A nearby table summarizes.) These totals are speculative, as the city council must revisit the matter in five years to determine whether the company deserves the property tax abatement for an additional five years. (This is known as a “five-plus-five year tax exemption.”)

    But the total value of the exemptions is relevant, as it flows into the benefit-cost ratio calculations.

    Given all the numbers the city presently reports from the CEDBR analysis documents, not including the value of the sales tax exemption is a significant omission, and one easy to correct.

    —
    Notes

    1. Wichita city council agenda packet for January 21, 2020, item V-1 ↩
    2. Center for Economic Development and Business Research. January 8, 2020, version 8. Available at https://drive.google.com/file/d/1Mg3B0sJVy67_r4gNl4NZbclZKZsdgQUx/view. ↩
    3. Assuming all sales taxes are paid during the first year. ↩
  • Wichita taxing district to expand

    Wichita taxing district to expand

    The City of Wichita plans to expand a special tax district.

    Next week the Wichita City Council will consider expanding an existing CID, or Community Improvement District, in the Delano neighborhood near downtown Wichita. A map provided by the city is nearby.

    Community Improvement Districts are a mechanism whereby extra sales tax is collected within a district. For this CID, the city asks to collect an extra two cents per dollar, which is the maximum allowed in Kansas.

    CIDs are distinguished from STAR bonds, in which incremental sales tax revenue in a district is captured and handled differently from the base sales tax. The sales tax rate remains as before. The ballpark and surrounding area use both CID and STAR bonds, as well as other public funding.

    In its analysis appearing in the agenda packet for the February 11, 2020 meeting, the city provides this:

    The expanded boundaries will permit the collection of additional CID revenues and the application thereof to development opportunities as well as the design and construction of the Stadium, utilities, parking, and other improvements related to the Stadium and river corridor improvements. The expansion further permits the use of funds to support the construction of public auditoriums and convention centers.

    The CID petition included the $83,000,000 stadium project, which includes both the $75,000,000 stadium and $8,000,000 in supporting infrastructure. The amended petition has an estimated project costs of $210,200,000, which includes the additional $127,200,000 in project costs related to the Riverfront Partners project.

    Project costs originally included costs related to the development of a multi-sport stadium, related infrastructure and adjacent commercial, retail residential and parking structures. The amendment has been expanded to include public auditoriums and convention centers as well as the additional commercial construction on the Development Site.

    In this context, “Development Site” refers to the Riverfront Partners site north of the ballpark, southwest of Douglas and McClean Boulevard.

    Of note, the CID includes a portion of the land included in the Riverfront Legacy Master Plan. The city contemplates that CID funds might be used there: “The petition also requests that the uses of CID revenues be expanded to include uses contemplated by the DA to be made on the Development Site, costs for additional parking and costs that may be associated with for potential development on the east side of the Arkansas River that is within the Stadium CID.”

    The item the council will consider also includes a correction, as explained by the city: “The petition also requests removal of certain City-owned property that was inadvertently included in the Stadium CID.”

    The city plans to borrow funds to be repaid by the CID tax collections: “The City anticipates issuing up to $13,000,000 in bonds, based on a pledge of CID revenue.”

    Don’t want to pay? Don’t go there.

    Does the use of CID mean the city has raised taxes? Certainly, the sales tax within the CID is higher (9.5 percent) than outside (7.5 percent). But that extra tax can be avoided. It is common for city council members to advise citizens that if they don’t want to pay the higher sales tax, just don’t go there.

    On the surface, this reasoning is correct. But as explained in city documents, the city is borrowing money to be repaid by CID tax collections. If enough people take this advice and avoid patronizing merchants within the CID, there may be a shortfall of money to make bond payments. Since the city’s policy is that CID bonds are not backed by the full faith and credit of the city, Wichita as a city is not on the hook. 1 But should this happen and the city defaulted on CID bonds, it would be a severe blow to the city’s reputation.

    A similar situation exists for the STAR bonds the city has issued to fund the ballpark and related spending. If the district fails to generate enough incremental sales tax revenue to make bond payments, city taxpayers are not liable. 2 But the failure of these bonds would, again, severely damage the city’s reputation.

    Further, the city expects property tax revenue to pay off tax increment financing (TIF) bonds issued in favor of the project.

    Even more, the city expects the economic activity generated by the ballpark and surrounding development to spin-off associated economic activity that will generate further tax revenue. If this does not happen, and happen in a big way, the project threatens to be a burden on the city budget, and by extension, taxpayers.

    From the agenda for the February 11, 2020 council meeting, showing area to be added and removed from the CID. Click for larger.

    —
    Notes

    1. City Of Wichita Community Improvement District Policy. “While the CID Act permits the issuance of either full-faith and credit general obligation bonds or special obligation bonds, payable solely from the CID revenue, it is the policy of the City of Wichita to issue only special obligation CID bonds.” ↩
    2. $42,140,000 City Of Wichita, Kansas Sales Tax Special Obligation Revenue Bonds (River District Stadium Star Bond Project) Series 2018. “The series 2018 bonds are not general obligations of the city and neither the full faith and credit nor the general taxing power of the city, the state, or any political subdivision thereof is pledged to the payment of the series 2018 bonds. The series 2018 bonds shall not constitute an indebtedness of the city, the state, or any political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction.” ↩
  • Wichita property tax rate: Up

    Wichita property tax rate: Up

    The City of Wichita property tax mill levy rose for 2019.

    In 1994 the City of Wichita mill levy rate — the rate at which real and personal property is taxed — was 31.290. In 2019 it was 32.721, based on the Sedgwick County Clerk. That’s an increase of 1.431 mills, or 4.57 percent, since 1994. (These are for taxes levied by the City of Wichita only, and do not include any overlapping jurisdictions.)

    Wichita mill levy rates. This table holds only the taxes levied by the City of Wichita and not any overlapping jurisdictions. Click for larger version.

    The rate for 2019 was up by 0.17 percent from 2018 and follows three years of virtually no change.

    Wichita mill levy rates. Click for larger version.

    The Wichita City Council does not set the mill levy 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.

    While the city council doesn’t have direct control over the assessed value of property in its jurisdiction, it does have control over the amount it decides to spend. 1 As can be seen in the chart of changes in the mill levy, the city usually decides to spend more than the mill levy is likely to generate in taxes. Therefore, the mill levy usually rises. 2

    Change in Wichita mill levy rates, year-to-year and cumulative. Click for larger version.

    It is more common for the mill levy to rise rather than to fall. In those years, the council does not take responsibility for the increase, insisting that the rate has not gone up, or that the rate is stable, or that an increase isn’t the council’s fault.

    An increase of 4.57 percent over more than two decades may not seem like much of an increase. But this is an increase in a rate of taxation, not tax revenue. As such, it is not appropriate to adjust for inflation.

    Inflation, however, does play a role in tax revenue. As property values rise, property tax bills also rise, even if the mill levy rate is unchanged. In Wichita, the taxes on a hypothetical home worth $100,000

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

    • Appreciation in the value of existing 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.

    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 2018 the city budget held this regarding the debt service fund: “In both 2013 and 2014, 0.5 mills were shifted back to the Debt Service Fund.”

    Taxes a homeowner pays

    Following, a chart showing the taxes paid to the City of Wichita for a hypothetical home. This includes changes in the value of the home (based on U.S. Federal Housing Finance Agency, All-Transactions House Price Index for Wichita, KS (MSA) [ATNHPIUS48620Q]) and inflation (based on Consumer Price Index Series II: CUUR0000SA0, U.S. city average, All items, Base Period 1982-84=100, Bureau of Labor Statistics). Click for larger versions.

    —
    Notes

    1. Although the city often grants property tax abatements at its discretion, thereby effectively removing that property from the tax rolls. ↩
    2. Mill Levy Facts, City of Wichita 2020 — 2021 Proposed Budget. “First, the City (the taxing district) arrives at a total amount for expenditures in the taxing funds. In Wichita these funds are the General Fund and the Debt Service Fund. After expenditure totals are known, all other revenue sources (non-property taxes and fees) are subtracted. The remainder is the amount to be raised from ad valorem (property) taxes. … The tax levy rate is calculated by dividing the total revenue to be obtained from property taxes by the total assessed value for the taxing district.” ↩
  • Wichita should post fulfilled records requests

    Wichita should post fulfilled records requests

    When the City of Wichita fulfills records requests, it should make those records available to everyone.

    When governmental agencies like the City of Wichita fulfill records requests, they could also publish the records on their websites. When records are supplied electronically to requestors, this is an additional simple (and low cost) step that would leverage the city’s effort and increase its value.

    Some federal agencies do this. For example at the U.S. Customs and Border Protection website, there is a page titled FOIA Library. An example entry on this page is titled “Executive Orders on Travel Records.” The explanation for this is “Contains all records released in response to requests and/or litigation pertaining to Executive Orders on Travel.” On that page are downloadable documents that were created in response to records requests.

    This does not need to be a complicated endeavor. Off-the-shelf solutions like Dropbox and Google Drive are easy to use and inexpensive. Google and other search engines will automatically index the documents.

    Posting fulfilled records requests is an easy way for the City of Wichita to start increasing transparency of its operations. Let’s get started, Mayor Whipple.

  • Naftzger Park event management agreement ambiguous

    Naftzger Park event management agreement ambiguous

    The profit-sharing agreement for Naftzger Park event management contains ambiguity that could lead to disputes.

    Today the Wichita City Council approved an agreement with Wave Old Town LLC for event management in Naftzger Park in downtown Wichita. The agreement was approved unanimously.

    While there was controversy over the awarding of the contract (Wichita Eagle reporting is here), others have noticed that the contract is imprecise in a way that could lead to problems.

    The city and Wave will share profits and losses based on a schedule in the management agreement contained in the agenda packet for today’s meeting, Item V-2. The issue is when the profit-sharing is calculated.

    Profit-sharing agreement for City of Wichita and Wave. Click for larger.

    Based on the way the profit-sharing is calculated, different profit-sharing results could be obtained from the same event history. The management services agreement the city council passed today does not speak to this issue. Neither does the request for proposal for event management.

    The issue is when the profit-sharing calculation is performed and using which data, as follows:

    • Profit-sharing could be calculated independently for each event, using data for just the current event. This is illustrated in example 1.
    • Profit-sharing could be calculated once at the end of the year (or another period) using the sum of events during the period. This is shown in example 2.
    • Profit-sharing could be calculated independently for each event, using cumulative data for the year (or another period). Example 3 illustrates.

    As the following examples show, the differences between these three methods of calculation could be substantial. These three examples assume two events, one with an event profit of $49,999, and the second with an event loss of $49,999. Notice that depending on how and when the same calculation is performed, Wave’s share of profits could be $0, or $25,000, or $49,999. The city could either lose $25,000 or $0.

    While these examples are contrived and use extreme values, they illustrate that the agreement the council passed is ambiguous. There could be disputes that could be avoided with careful attention to detail by the city when constructing contracts.

    Click for larger.
  • Wichita legal notices an easy start on the path to transparency

    Wichita legal notices an easy start on the path to transparency

    Kansas law requires publication of certain notices in newspapers, but cities like Wichita could also make them available in other ways that are easier to use.

    Legal publications in the Wichita Eagle, occupying nearly the entire page.
    As Wichita’s new mayor takes office, there are a few things the city could do to increase the availability and distribution of government information. An easy project to accomplish would be placing legal notices on the city’s web page.

    Kansas law requires that many legal notices must be printed in a newspaper. That law needs to be changed. Newspapers resist this reform, as it might mean a loss of revenue for them. (That’s right. Newspapers don’t print these notices as a public service.)

    Although the law requires publishing notices in a newspaper, it doesn’t prohibit publishing them in electronic form. If governmental agencies would make their legal publications available in ways other than the newspaper, citizens would be better served.

    The City of Wichita does some posting of legal notices on its website. Under the City Clerk section, there is a page titled “Legal Notices” that holds notices of bidding opportunities. This is good, but the notices that are important to most people are not on the city’s website.

    Some of these notices appear in city council meeting agenda packets, where they may be buried in 500 pages of other material.

    Posting all city legal notices on the city’s website would be easy to do. It would be quite inexpensive, as the copy is already in electronic form. The notices would become searchable through Google and other methods. Interested parties could capture and store this material for their own use. Once people get used to this method of publication, it will make it easier to get state law changed.

    Posting legal notices on its website is an easy way for the City of Wichita to start increasing transparency of its operations. Let’s get started, Mayor Whipple.