Voice For Liberty

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  • Lavonta Williams campaign contributions raise a few questions

    See end of article for disclosure.

    Analysis of the campaign finance report recently filed by Lavonta Williams, current Wichita city council member and candidate for re-election, revealed a few interesting insights about her campaign.

    First: The campaign contributions are concentrated from one industry. Of the $16,550 in cash contributions raised by the Williams campaign and disclosed in this report, $10,500 (63%) came from sources that are real estate developers, or from people closely connected to them such as their spouses. These developers are often asking city hall for subsidy or favor.

    I asked council member Williams a few questions by email, such as: Can you explain why this industry supports your candidacy so strongly? Do you think there is any linkage between your support for TIF districts and other subsidies that benefit many of these developers and their contributions? (Her answer is reported following.)

    Second, this concentration of contributions by one industry may be even stronger than reported above. It appears that $1,050 in contributions are from 14 attorneys (or spouses) that work for one law firm, Hinkle Elkouri Law Firm LLC. This firm has among its clients several of the developers who contributed the 63% reported above. I asked council member Williams if there is any reason for the generosity of this one law firm.

    Third, even non-downtown developers are contributing to the Williams campaign. Near the end of June, Kevass Harding and his wife contributed a total of $1,000, the maximum allowed by law, to the Williams campaign. This was right before Harding appeared before the city council in July and August as an applicant for TIF district financing. I asked council member Williams these questions: How did Harding come to make this contribution? How did he know that you were considering a run for office? Was there any connection between the contribution and your advocacy for his TIF district?

    I received an email message from council member Williams in response to my questions. Here it is, in its entirety:

    Mr. Weeks,

    Throughout my 35+ years of service as an educator, neighborhood and community activist, I have met and worked with many people who have given back to this community and made a difference in the lives of Wichitans. Some of them are supporting my campaign, and I am grateful for that support as we continue to work together, in our various ways, to making Wichita a better place.

    I think we can say that Ms. Williams chooses not to answer the questions I asked.

    Fourth, there are some peculiar aspects of this campaign finance report regarding dates. The cover sheet states the report covers the time period April 1, 2008 through July 16, 2008. A check with the Kansas Governmental Ethics Commission confirmed that the report should have covered through December 31, 2008, as did the reports for other candidates for city council.

    That office told me they had checked with the Williams campaign, and that the campaign said there were no contributions from the middle of July to the end of December. It seems strange that there would be a flurry of contributions to the campaign in June and July, and then nothing — not even one contribution — for the remaining months of 2008.

    A curious omission from the list of contributors is anyone connected to Real Development.

    It won’t be long before another campaign finance report will be due. It will be interesting to see if council member Williams can broaden the base of her supporters.

    Disclosure: I am a supporter of James Barfield, an opponent of council member Williams, and have provided volunteer service to his campaign.

  • Articles of Interest

    Education reform, downtown Wichita arena, Kansas smoking ban, downtown developers

    Education’s Ground Zero (Nicholas D. Kristof in The New York Times) Describes the efforts of Washington D.C. public schools chancellor Michelle Rhee to reform the system. She’s fired one-third of the principals. Kristof reminds us of the importance of teachers: “The reform camp is driven partly by research suggesting that great teachers are far more important to student learning than class size, school resources or anything else. One study suggests that if black kids could get teachers from the profession’s most effective quartile for four years in a row, the achievement gap would disappear.” In Wichita, however, USD 259 is taking the opposite approach.

    Intrust Bank Arena management contract unusual, but not necessarily bad (Bill Wilson in the Wichita Eagle) Explores the nature of the arrangement between Sedgwick County and SMG as compared to other arenas. “The bottom line for these officials: Sedgwick County has a good deal with SMG, but has a responsibility to closely monitor the arena’s performance for taxpayers who paid for the building with a sales tax increase.” More coverage of related issues is Wichita downtown arena contract seems to require Sedgwick County approval.

    Details of Intrust Bank Arena contract with Thunder are a secret (Bill Wilson in the Wichita Eagle) This is an earlier story, interesting for the confusion it raises or exposes, I’m not sure which. Reported in the story: “The arena’s financial performance would be monitored by the county through what [Sedgwick County assistant manager Ron] Holt characterized as limited records access. But [Sedgwick County Commissioner Gwen] Welshimer said she didn’t know how the county would track the arena’s financial performance. ‘We don’t have any access to their books that I know of,’ she said.” Read the county’s contract with SMG, however, and you learn that SMG will maintain accounting records, have them audited, and give Sedgwick County access to them “upon reasonable advance notice.” Also, the county has the right to audit the records at any time.

    Why state smoking ban seems inevitable Rhonda Holman in the Wichita Eagle Editorial Blog) In this post, Wichita Eagle editorialist Rhonda Holman makes explicit the connection between state-paid health care and the state’s interest in controlling behavior: “That’s [passing the statewide smoking ban] the only responsible action the Legislature can take, given the increasing cost burden of smoking-related illnesses on the state …” If the state (that includes the U.S. Federal government) starts taking responsibility for more health care, smoking bans are just the start of state meddling in behavior.

    Minnesota Guys ready to start face-lifts of downtown Wichita buildings (Bill Wilson in Wichita Eagle) Real Development starts work on the improvement of facades of some of its buildings. In the article developer Michael Elzufon manages to use the word “iconic” twice. This article doesn’t tell how these improvements are paid for: a confusing arrangement where the city loans money and recoups it in special assessment taxes. A hefty development fee is being paid to the developers, which allows them to profit for fixing up their own buildings. But they’ll pay that back in the form of the special taxes — or will they? It’s hard to tell where the money is going in these agreements. This benefits developers like Elzufon and politicians on the Wichita city council, as if citizens knew what was really going on, they wouldn’t be happy.

  • Tax increment financing questions topic at Wichita city council meeting

    On Tuesday the Wichita city council heard a request by Real Development for a $2.5 million increase in tax increment financing on a downtown project. Discussion during the meeting revealed how little is known about the numbers that the city uses in deciding whether to participate in the project. Numbers that don’t make sense, plus the fact that the applicant has not responded to the city’s request for new numbers, indicate that this proposal should be rejected.

    A question that I asked referred to some numbers presented by in the materials supplied to council members in the public, specifically the total investment and market value for the project. When the project was revised for the first time in 2008, the plan called for total investment of $27,800,000, producing a project with market value of $33,803,000. In this plan the market value is greater than investment, which seems like a good thing.

    In the second revision presented to the council this week, here are the values: Total investment is $46,491,728, while the market value is $41,695,000. Now the market value is less than investment. In fact, it is ten percent less than the amount invested.

    I asked how are these market values determined, and is it wise to have investment that is so much greater than market value? In the video below, I think we can agree that a satisfactory answer was not provided.

    In particular, the city’s economic development chief Allen Bell said that he had asked the applicants for updated information on these figures, but had not received it. This was revealed at the time the council was being asked to make an investment of some ten million dollars of taxpayer funds.

    The fact that there was confusion, and data not made available to the city, at the time the council is being asked to make a decision casts quite a bit of doubt on the entire decision-making process.

    A second question I asked had to do with the fact that the TIF district is quite a bit larger than the specific buildings that are the subject of the TIF financing request, and not all the property in the district is owned by the applicants. I asked that as property values — and therefore tax payments — in the other property in the district rises, does its increased valuation go towards paying off the TIF bonds? The answer from Bell was no.

    A second question was what if these other property owners in the TIF district wanted to obtain TIF financing of their own. Does the fact that their property is already in a TIF district prevent them from receiving TIF financing? The answer from Bell was no.

  • Williams — King — Minnesota Guys connection raises concern

    There’s a triangle of influence and connections that should raise flags of caution as voters decide the makeup of the Wichita city council.

    At the center is Beth King, a Wichita public relations executive. She’s well known in city hall, having managed the mayoral campaign of Carl Brewer in 2007. She’s said to be a close advisor to him. Her name is so familiar that when her emails are forwarded among department heads in city hall, she’s referred to as simply “Beth.” No last name is necessary.

    The connection that voters should be aware of is this: King is the campaign manager for Lavonta Williams, who is seeking election to the district 1 council seat she holds after being appointed to fill the remainder of Brewer’s term after he was elected mayor.

    King is also the public relations consultant for Real Development. This firm — best known for its principals the “Minnesota Guys” — is a beneficiary of Wichita taxpayer dollars in the form of TIF districts and facade improvement loans paid back by special tax assessments.

    Lavonta Williams voted for each of the programs the Minnesota Guys wanted. Enthusiastically.

    The Minnesota Guys will be asking for more TIF financing, according to Wichita Eagle reporting.

    Lavonta Williams, should she be elected to a new term on the council, will be voting on whether to give the Minnesota Guys access to more Wichita taxpayer funds.

    Who will advise Williams how to vote? Beth King, her campaign manager, with financial ties to the Minnesota Guys?

    It’s a relationship too close for taxpayer comfort.

  • North Dakota TIF video informative, reminiscent of Wichita

    The North Dakota Policy Council has a video on YouTube that explains the mechanics of tax increment financing (TIF) districts and the public policy problems associated with TIF.

    The video is presented in three sections. The material in the first section is different from the way TIF districts work in Kansas, but the other two sections are very similar to the way the law works in Kansas.

    At the start of part 3 (“Problems with TIFs”) the narrator states the problem succinctly: “Tax increment financing negatively affects everybody’s property tax bill by taking the tax revenue from increased taxable valuations on the properties in the TIF areas and putting that into TIF accounts.”

    She then presents an illustration showing how the property taxes for non-TIF properties have to rise to make up for the fact that taxes from TIF properties do not go towards paying for city, county, or school district services. While Wichita doesn’t use the term “TIF accounts” as used in this video, the economic effect is the same.

    The video also mentions politically-favored developers being the beneficiaries of TIF districts, specifically mentioning “a friend of the city who might own property that is struggling.” I wonder: is the North Dakota Policy Council aware of the situation in Wichita, where many feel that the city is bailing out Real Development (also known as the “Minnesota Guys”) by not only granting TIF financing to them, but increasing the amount of TIF financing against the recommendation of its independent consultant?

    When you add the fact that our city manager’s girlfriend has the Minnesota Guys as a client and the city — specifically Mayor Carl Brewer — will not forthrightly explain this situation and the city’s response to citizens, we have a problem in Wichita.

    Compounding the problem is the obvious lack of understanding of the economic effects of TIF districts by members of the Wichita City Council, and possibly by city hall bureaucrats, too. Wichita vice mayor Jeff Longwell has complained to the Wichita Eagle that the public doesn’t understand tax increment financing. We should be questioning Longwell’s own understanding, and that of council member Janet Miller, too.

    Longwell and Miller — the rest of the council too, for that matter — are aided by newspaper reporters like the Wichita Eagle’s Bill Wilson, who is dismissive and hostile towards free markets and those who advocate for them, calling reliance on markets “intellectually shallow” and a “thin ideological argument.”

  • More intervention for Wichita proposed

    Tomorrow the Wichita City Council will consider accepting petitions for the formation of another Community Improvement District. In this case the applicant is the Broadview Hotel in downtown Wichita.

    This hotel is already the recipient of potentially $4.75 million in Kansas historic preservation tax credits. Despite the name of the program, the tax credits are in effect a grant of money to the developers.

    Now the hotel seeks permission to charge extra sales tax for its own benefit.

    The action the council may take tomorrow is on the consent agenda, as noticed by the Wichita Eagle’s Brent Wistrom. The consent agenda is usually reserved for non-controversial items. It’s likely that many more CIDs will be proposed, so many that accepting petitions requesting their formation is now considered a routine item of business.

    Each CID, however, must have a public hearing. But already council members have indicated they are ready to approve all CIDs, and council members are not receptive to opposition, if a televised overheard whispered remark by one council member is any indication.

    Separately a proposed downtown Wichita grocery store gets government assistance. Announced by the Kansas Department of Commerce, the Exchange Market & Deli in downtown Wichita can receive $2.5 million in government stimulus financing. The bonds are exempt from federal income taxes, and the federal government pays 45 percent of the interest. It’s part of President Obama’s stimulus program.

    The project this grocery store is attached to — Exchange Place — is the beneficiary of over $10 million in Wichita tax increment financing. That is, if the developers, Real Development, can close on their financing of a nearby project. That financing has been delayed several times.

    Each of these projects is another example of increasing government intervention in the future of downtown Wichita. Each represents a loss of economic freedom to Wichitans, as the city council uses taxes to override the decisions that thousands of Wichitans have made as to where to live and locate their business. Some of the city council members that consistently vote for these interventions describe themselves as conservative.

  • North Dakota TIF video reminiscent of Wichita

    The North Dakota Policy Council has a video on YouTube that explains the mechanics of tax increment financing (TIF) districts and the public policy problems associated with TIF.

    The video is presented in three sections. The material in the first section is different from the way TIF districts work in Kansas, but the other two sections are very similar to the way the law works in Kansas.

    At the start of part 3 (“Problems with TIFs”) the narrator states the problem succinctly: “Tax increment financing negatively affects everybody’s property tax bill by taking the tax revenue from increased taxable valuations on the properties in the TIF areas and putting that into TIF accounts.”

    She then presents an illustration showing how the property taxes for non-TIF properties have to rise to make up for the fact that taxes from TIF properties do not go towards paying for city, county, or school district services. While Wichita doesn’t use the term “TIF accounts” as used in this video, the economic effect is the same.

    The video also mentions politically-favored developers being the beneficiaries of TIF districts, specifically mentioning “a friend of the city who might own property that is struggling.” I wonder: is the North Dakota Policy Council aware of the situation in Wichita, where many feel that the city has bailed out Real Development (also known as the “Minnesota Guys”) by not only granting TIF financing to them, but increasing the amount of TIF financing against the recommendation of its independent consultant?

    Compounding the problem is the obvious lack of understanding of the economic effects of TIF districts by members of the Wichita City Council, and possibly by city hall bureaucrats, too. Wichita vice mayor Jeff Longwell has complained to the Wichita Eagle that the public doesn’t understand tax increment financing. We should be questioning Longwell’s own understanding, and that of council member Janet Miller, too.

    Longwell and Miller — the rest of the council too, for that matter — are aided by newspaper reporters like the Wichita Eagle’s Bill Wilson, who is dismissive and hostile towards free markets and those who advocate for them, calling reliance on markets “intellectually shallow” and a “thin ideological argument.”

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