Wichitans carry a “Taxpayer Burden” of $1,200 per taxpayer, which is not as bad as many cities.
Truth in Accounting is an organization that works to improve the reliability and transparency of governmental financial information. 1 Annually, it produces a report titled Financial State of the Cities that examines the fiscal health of cities. The report does not take into account economic factors like economic growth, but instead compares a city’s assets with the bills it has accumulated.
Most cities, Wichita included, have a shortfall. The primary reasons for a shortfall are unfunded pension liabilities and unfunded post-employment benefits, called OPEB. TIA explains: “When cities do not have enough money to pay their bills, TIA takes the money needed to pay bills and divides it by the estimated number of city taxpayers. We call the resulting number a Taxpayer Burden and rank cities based on this measure.” 2 The report released this month is based on comprehensive annual financial reports (CAFR) for fiscal year 2018.
In the net, Wichita has a taxpayer burden of $1,200 per person, meaning “If retirement benefits or other costs are not reduced, then taxpayers could have to pay $1,200 in future taxes without receiving any related services or benefits. According to TIA, “Wichita’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years. Of the $1.5 billion in retirement benefits promised, the city has not funded $257.4 million in pension and $34.9 million in retiree health care benefits.”
Wichita ranks eighteenth among the nation’s 75 largest cities (the rank of one is best.) Wichita earned a grade of “C” along with 27 other cities.
In the previous year, Wichita ranked tenth, having a surplus of $800 per taxpayer.
By the way, the Government Financial Officers Association (GFOA) standard is for cities to publish their CAFRs 180 days after the end of the fiscal year. TIA says it is ideal for cities to publish within 100 days. Wichita published in 179 days.
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Notes
“The nonpartisan mission of TIA is to educate and empower citizens with understandable, reliable, and transparent government financial information. TIA is a 501(c)(3) nonprofit, nonpartisan organization composed of business, community, and academic leaders interested in improving government financial reporting.” See https://www.truthinaccounting.org/about/page/faqs-2. ↩
Federal revenues for 2019 were up, but spending increased by a larger amount, resulting in a higher deficit.
The Congressional Budget Office has released its summary for fiscal year 2019, which ended on September 30, 2019. The headline numbers are these:
In fiscal year 2019, which ended on September 30, the federal budget deficit totaled $984 billion — $205 billion more than the shortfall recorded in 2018. The deficit increased to 4.6 percent of the nation’s gross domestic product (GDP) in 2019, up from 3.8 percent in 2018 and 3.5 percent in 2017. As a result, federal debt held by the public rose to 79.2 percent of GDP, up from 77.4 percent at the end of fiscal year 2018.
CBO reports that total receipts were up by 4.0 percent over the previous year, but outlays rose by 8.2 percent. A timing factor, however, inflates the outlay figure, as CBO notes: “That increase would have been about $44 billion smaller — resulting in an increase of 7.1 percent — if not for the shift of certain payments from October 2017 to September 2017 because October 1 fell on a weekend.”
The chart of outlays and receipts provided by CBO expresses these values as a percent of gross domestic product. Federal outlays are now above the long-term average.
Looking at the number of government employees in proportion to population, Kansas has many compared to other states, and especially so in education.
Each year the United States Census Bureau surveys federal, state, and local government civilian employees. I’ve gathered this data and present it in an interactive visualization using several views and supplementary calculations. 1
The Census Bureau collects both counts of employees and payroll dollars. Comparisons based on the number of employees are useful, bypassing issues such as differing costs of living and salaries in general.
Click for larger.Considering all government functions, Kansas has 69.50 full-time equivalent (FTE) employees per thousand residents in 2018. Only two states and the District of Columbia have more.
For total elementary and secondary education employment, Kansas has 29.78 such employees (full-time equivalent) per thousand residents. Only two states have more.
In the following chart of total employees, total elementary and secondary education employees, and total higher education employees, Kansas stands out from its neighbors and the nation. In almost all cases, Kansas has proportionally more government employees, and often by a large margin.
In this example from the visualization showing Kansas and nearby states, Kansas stands out. Click for larger.
In 2014 the City of Wichita advised spending millions on a water project, but it wasn’t for the main water treatment plant replacement, and it wasn’t financed with debt.
The city tells us it has been planning for a new water plant for many years. This summer the Wichita Eagle reported: “Until recently, not much has been done about building a new plant. It was first identified as a need for the city in 1993. Two years later, Wichita bought land for it near 21st and Zoo Boulevard. But the city didn’t start searching for construction funding until after the assessment in 2017.” 1
In 2014, however, the city’s attention was focused, at least partly, on water issues. But it wasn’t the main water treatment plant that was of concern.
Instead, the city was worried about drought protection and the conservation measures that might be imposed during an extended drought. In July 2014, the city prepared a document titled “Strategic Plan Implementation Timetable.” 2 Regarding water, the activity needed was:
1. Develop a plan that addresses:
A. New water sources
B. Conservation strategies
C. Reuse opportunities for industry
D. Emphasize water as a priority with the State and Congressional delegation
E. Work with area communities to ensure water is also a priority for them
While these are vague and open to interpretation, there’s nothing on this list like “Secure funding to replace our aging main water treatment plant.”
The city’s solution that it recommended to Wichitans was expansion of the Aquifer Storage and Recharge (ASR) system. This is a project north of Wichita that takes water from the Little Arkansas River, treats it, and injects it into wells in the Equus Beds. That’s an underground aquifer that, along with Cheney Reservoir, supplies Wichita’s water treatment plant. 3
It was planned that by filling the Equus Beds with river water, that would be water Wichita could draw upon in time of need, like during an extended drought.
To pay for ASR expansion, the city asked Wichitans to vote on a city sales tax. It would be an additional one cent per dollar, last for five years, and was projected to raise $400 million. Of that, $250 million was planned for ASR expansion. Other sales tax monies would fund economic development, transit, and street repairs.
Voters did not approve the sales tax, with 62 percent voting against it. Since then, there hasn’t been much talk about the ASR project.
With that history, we should ask this question: When the city was concerned about drought protection in 2014, was it also concerned about the condition of the main water treatment plant?
While the city says it has been planning for the main treatment plant’s replacement, that didn’t seem to be evident in 2014. A review of city documents, news reports, and memory finds no mention of the upcoming need for a new main water treatment plant. All the attention was on ASR and the need for drought protection, not basic water treatment and supply.
I think this means one of two things: The main water treatment plant wasn’t a concern or priority in 2014, no matter what the city says now.
Or, if the main water treatment plant was in the planning stages at the same time the city was recommending spending $250 million on a different water project, we have to ask why the city didn’t tell us that?
Hiding the need for a new plant, if that’s what the city did, would have been a grand deception. The city should have told voters this in 2014: “We recommend you spend $250 million on the ASR expansion project, and oh by the way, we also need to spend twice that much on a new main treatment plant in a few years.”
Currently, the city tells us, “Our current water treatment facility is 80 years old and is in need of replacement.” 5
Well, in 2014 the plant was 75 years old. Wasn’t it foreseeable that the plant needed replacement then?
There’s also this: The expanded ASR plant would not have worked without a functioning main water treatment plant, as that’s where ASR water goes. In fact, the city planned to spend $86,579,022 of sales tax proceeds to build a parallel pipeline from the ASR facility to the existing main water treatment plant.
Paying for water
Click for larger.
In 2014, the city recommended against debt as a means of paying for the ASR project. A city document advised, “The use of sales tax funding for the project would save the community $221 million in financing costs over 20 years.”
Debt was discouraged. Paying now, through the sales tax, was advised.
So, what has changed? Is debt now good, simply because the city believes it can participate in a low-interest federal loan?
In 2014, the city advised raising $250 million for water through a sales tax. The entire sales tax that the city proposed — one cent per dollar for five years — would raise $400 million, which is pretty close to the bill for the new main water treatment facility.
If a sales tax for water was good in 2014, why not now? Especially considering that the 2014 water project was non-essential, while the need for a new main water treatment plant is seen as vital to the region’s future.
A sales tax of one cent per dollar for six years would raise $480 million, based on the projections used in 2014. It would likely raise more now. Is this an option the city should consider?
Then, let’s wonder who to hold accountable for this not being an issue in 2014.
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.
In 2014 Wichita voters rejected a sales tax which would have provided $250 million to spend on a water project. What were the city’s concerns?
A recent Wichita Eagle article has ignited some revising of history regarding Wichita’s water infrastructure. 1 The article is grim, starting with, “Next time water comes out of your tap, don’t take it for granted. Wichita’s only water treatment plant could fail at any moment.” The article reports on the poor condition of Wichita’s existing water infrastructure, particularly the central water plant.
Wichita recently dealt with spending on a water project. That was in 2014, when the city asked voters to decide on a one cent per dollar sales tax for five years. Of the estimated $400 million the tax would raise, $250 million was earmarked towards water infrastructure. Since voters did not endorse the tax, some have blamed voters for the city’s current problems regarding water infrastructure.
Here, for example, is a social media exchange on Monday. The first person wrote, referring to Wichita Public Works Director Alan King, “Mr King is only now sounding a warning when he knew 8 years ago there was a problem?”
A second person responded: “Wrong Wrong Wrong. King has been yelling about this since he got here. Remember the temporary sales tax for the water where the citizens obeyed the Billionaire and his million dollars that said we can take the risk?”
To understand the errors in the second person’s comment, we need to understand the meaning of “for the water” and “the risk.” City documents have the answer.
A Wichita city white paper from May 2014 cites a community survey, concluding, “Wichitans have ranked a reliable water supply as their most important priority.” 2 The city interpreted citizens’ concerns are requiring protection from drought: “Protecting water sources during periods of drought is an important part of long-term water supply planning.” The paper presented “two options meet the goal of providing water for community growth and drought protection.” One option was using water from El Dorado Reservoir, and the second was expanding the ASR system. This paper does not mention the condition of existing water infrastructure.
On May 27, 2014 City Manager Robert Layton presented to the city council a “Strategic Plan Follow Up,” providing information about the possible uses of the proposed city sales tax. 3 For water issues, the only consideration was drought protection.
In July 2014, the city prepared a document titled “Strategic Plan Implementation Timetable.” 4 Regarding water, the activity needed was:
1. Develop a plan that addresses:
A. New water sources
B. Conservation strategies
C. Reuse opportunities for industry
D. Emphasize water as a priority with the State and Congressional delegation
E. Work with area communities to ensure water is also a priority for them
The long-term objective for water was: “Secure sufficient capacity from two identified options to provide water that supports the long-term growth of Wichita while protecting water users from future droughts. Implement cost-effective conservation strategies that complement water source capacity.”
Under measurements of success there were these items:
Year of final protection in a 1% drought without additional conservation efforts (target is 2030).
Variance in firm yield compared to demand in 2060 (target is 0%).
Volume of water treated (target is 20.8 billion gallons per year).
Annual water reductions from conservation programs (target is 0.35%).
Water conservation program cost to achieve water reduction goal (target is $300,000 annually).
None of this material mentions the condition of existing water infrastructure.
In September 2014 the city published a document titled “Water Supply Plan: The Proposed 1-cent Sales Tax.” 5 under “Plan Summary,” the document states: “Sales tax revenue would fund a new water supply, through Aquifer Storage and Recovery (ASR) improvements. This new supply would reduce the impact of any future drought and would support job growth.”
Later, the document says the plan does the following:
Pulls more water from the Little Arkansas River
Constructs new storage basins
Further utilizes existing treatment plant capacity
Stores treated water underground where it doesn’t evaporate
Builds an additional pipeline
The document clarifies that the “additional pipeline” is a “parallel pipeline” from the ASR plant to the central water plant.
Information from the City of Wichita. Click for larger.
An information sheet prepared for citizens said the same and warned of the costs of borrowing to pay for these facilities. 6
A lengthier presentation prepared for voters by the city held this:
THE NEED
Demand for water is expected to increase by more than seven billion gallons per year by 2060. A new water supply is needed to meet this demand. If the community should experience a significant drought, residents would face severe water restrictions.” 7
From these city documents, we can understand the error in the second commenter’s remarks. In the context of 2014, taxing and spending “for the water” meant expansion of supply, not maintenance of existing assets.
Further, in 2014 “the risk” that was to be addressed was the risk of water use restrictions in case of an extended drought. The risk of basic water plant infrastructure failing was not considered or addressed in the city’s plan for spending $250 million on a water project.
Transit in Wichita isn’t working very well, and it is expensive.
A recent editorial in the Wichita Eagle proclaims, “If Wichita genuinely wants to be a vibrant, modern city, we have to improve our public transportation.” 1 This was inspired by the recent story of a Wichita State University employee chronicling his experience riding the bus to work for a week. The Eagle reported: “What Lucas found riding the bus for a week was that his regular 11-mile, 17-minute car commute was, on average, an hour and 35 minutes on Wichita Transit. Each way.” 2
There is little doubt that relying on the regular scheduled bus service in Wichita is frustrating for most riders. Some find it unusable. Given that, how much do we pay for transit?
The National Transit Database holds annual profiles for transit agencies. They are not easy to locate, and the numbers are presented in very fine print. I’ve excerpted some data for Wichita for 2017 and present tables nearby. (Clicking may produce larger versions.)
Of note: Fares account for 13.5 percent of operating revenue, not including the costs of buses, which are a capital expense. Someone else pays a lot of the expenses: For operating expenses, 51.4 percent comes from state and federal sources. For capital expenses, 82.4 percent is from federal sources.
For scheduled bus service, the cost per passenger mile is $1.44. and the cost of an unlinked passenger trip is $8.08. (An “unlinked passenger trip” is counted whenever someone boards a bus. For someone who rides a bus downtown and transfers to another bus — like the WSU employee — that counts as two unlinked trips. Two in the morning, then another two in the afternoon, for a total of four unlinked trips each day, or $32.32 for the day.)
Most of these costs for scheduled bus service are fixed in nature, meaning that they don’t increase with additional passengers. With more passengers, these costs on a per-mile or per-trip basis will fall, and if the additional passengers pay fares, the portion of expenses paid by fares will rise.
The costs for bus service in Wichita are not out of line with other similar cities, although costs rose rapidly in Wichita for 2016 and 2017, as can be seen in the nearby chart. (This chart comes from an interactive visualization of national transit data that I developed. Click here learn more about the data and to access the visualization.)
$8.08 per unlinked trip is a lot. $32.32 per day to travel to and from work is a lot. It seems like we ought to be able to provide better service. But I think Wichita provides about the same level of service as other similar cities.
An interactive visualization of data over time from the National Transit Database. Now with data through 2017.
Do you wonder how much it costs to run your transit system? The National Transit Database holds data for transit systems in the U.S. I’ve gathered some key statistics and presented them in an interactive visualization.
In the case of Wichita, we see that “OpExp per PMT” for 2017 was $1.44. This is total operating expense per passenger mile traveled. It’s not the cost to move a bus a mile down the street. It’s the cost to move one passenger one mile. And, it is operating cost only, which means the costs of the buses are not included.
Some definitions used in the database:
UZA: The name of the urbanized area served primarily by a transit agency.
UPT: Unlinked passenger trips. “The number of passengers who board public transportation vehicles. Passengers are counted each time they board a vehicle no matter how many vehicles they use to travel from their origin to their destination.”
PMT: Passenger miles traveled.
Total OpExp: Total operating expense.
Click here learn more about the data and to access the visualization.
Data from the annual report for USD 259, the Wichita, Kansas, public school district.
The Comprehensive Annual Financial Report for USD 259, the Wichita public school district, provides a look at trends over the years. The document, along with those from previous years, is available here. Here are some highlights from the CAFR for the year ending June 30, 2018, known as fiscal year 2018.
(Click charts for larger versions.)
The following chart shows data from the CAFR along with my calculations. I took two data series, “total revenue” and “sum of state and local revenue,” then divided by FTE enrollment and adjusted for inflation. (The inflation adjustments cast past dollar values in terms of current-dollar equivalents, meaning past values are usually reduced.) I plot the sum of state and local revenue because in 2015 there was a change in the way some taxes were allocated. Plotting the sum of the two removes the effect of the change.
While USD 259 — and schools generally — complain about funding cuts, the following chart shows funding nearly always increases, and over time, by quite a bit.
The following chart shows spending categorized by “instruction” and “instructional support” per student in inflation-adjusted dollars. Capital spending is not included in this chart.
In 2006, USD 259 spent $579 per student (inflation-adjusted) on administration. For 2018 the figure is $927. Could the Wichita public school district cut administration spending to 2006 levels, on a per-student, inflation-adjusted basis?
The Wichita school district has been able to reduce its student/teacher ratios substantially over the last ten to fifteen years. (Student/teacher ratio is not the same statistic as class size.) There have been ups and downs along the way, but for all three school levels, the ratios are lower than they were years ago, and by substantial margins. This means that Wichita schools have been able to increase employment of teachers at a faster rate than enrollment has risen.
On enrollment, the superintendent’s letter says this:
The District’s enrollment trend over the last ten years has reflected an average increase of over 100 students a year. However, budget reduction measures and changes to Kindergarten funding at the state level are beginning to impact this trend. In FY’17, official enrollment decreased by 572 students, or one percent. Official enrollment in FY’18 increased by 80 students, but gains in virtual and alternative programs were offset by a significant decrease in elementary age students. The elementary enrollment decline continued into FY’19, with a loss of over 500 elementary students. Offsetting some of this loss, Secondary enrollment increased by 240 students. The declines in past few years can partially be attributed to cost-cutting measures under the block grant, including denial of out-of-district students, the consolidation of alternative high school programs, and the combination of a longer school day and shorter school year, which many parents viewed as negatively impacting their students. Further, now that the State fully funds all-day Kindergarten, parent who used to enroll students in the District to obtain all-day Kindergarten services can now receive those same services in the surrounding area districts. Additional FY’19 funding allowed the District to return to the longer school year, but it remains unclear if this action will bring back elementary students to the District.’
Kansas assessment results are now reported in four levels. Level 1 indicates that a student shows a limited ability to understand and use the mathematics skills and knowledge needed for college and career readiness. Level 2 indicates that a student shows a basic ability to understand and use the mathematics skills and knowledge needed for college and career readiness. Level 3 indicates that a student shows an effective ability to understand and use the mathematics skills and knowledge needed for college and career readiness. Level 4 indicates that a student shows an excellent ability to understand and use the mathematics skills and knowledge needed for college and career readiness.
For Wichita, the trend is that an increasing proportion of students are at performance level 1. Correspondingly, the proportion at level 2 or better is falling.
Following, a chart of the portion of Wichita public school students testing at performance level 1, the lowest level.
Following, for performance level 2 or better, indicating, “a student shows a basic ability to understand and use the mathematics skills and knowledge needed for college and career readiness.”
Following, for performance level 3 or better, indicating, “a student shows an effective ability to understand and use the mathematics skills and knowledge needed for college and career readiness.”
Following, for performance level 4, indicating, “a student shows an excellent ability to understand and use the mathematics skills and knowledge needed for college and career readiness.”
