Wichita should consider discarding the water plant contract in order to salvage its reputation and respect for process.
This week the Wichita City Council will consider approving a contract with Wichita Water Partners to build a new water treatment plant. It’s a controversial matter that likely played a significant role in the recent mayoral election. Wichita Eagle reporting by Chance Swaim in the story Wichita’s mayor steered multi-million-dollar water plant contract to friends traces through the issues.
The most important thing is that the city receives a reliable water plant that meets its needs. Currently, the city operates a plant that is the only source of water. It’s described as having outlived its useful life. At any moment over the next several years, the city might have to spend millions to repair a plant it will retire soon.
It’s also important that the city does not reward the corruption — petty or not — surrounding the awarding of this contract. Mayor Longwell was defeated in his bid for reelection, and that sends a message. But the other corrupt party is being rewarded, as it seems likely the city council will approve the contract with Wichita Water Partners. Its principals sought to influence the mayor by wining and dining. (Literally, they offered to deliver leftover wine to the mayor.) They flattered the mayor with honorifics like Mayor Miracle, Your Eminence, His Highness, Homecoming Queen, Eye Candy, Jethro, and Wine Delivery Guy.
Besides this, Wichita Water Partners was not honest with the city. The Wichita Eagle reported this: “Rod Young, president of the engineering firm PEC, and Roger McClellan, president of the construction company Wildcat, both acknowledged to The Eagle their relationships with the mayor. They did not disclose those relationships to the city on a form asking about potential conflicts of interest in the water project.” (emphasis added) PEC and Wildcat are part of Wichita Water Partners.
But the coddling of Longwell worked. After paying the mayor’s $1,000 fee to enter a charity golf tournament, Longwell told them, “I’m going to be super nice to you for a long time.” Longwell switched the basis of awarding the contract, proposing a “design competition.” But only one firm entered the competition, Wichita Water Partners. Jacobs, one of the largest engineering firms, was originally and unanimously preferred by the city’s selection committee. But the company decided not to enter the design competition. The result was only one company participating in the mayor’s “contest.”
There are important considerations going forward, especially as the city considers spending one billion dollars or more on new projects like a convention center, performing arts center, and other downtown projects:
The selection committee had significant concerns regarding Wichita Water Partners and its proposal. Since the city overrode the committee’s strong recommendation, will the recommendation of other similar committees be taken seriously? Will other committees feel their job is important? What about citizen advisory boards?
One of the nation’s largest and most respected engineering firms declined to participate in the mayor’s “design contest.” Will the city be able to attract bids from other reputable firms given the way the water plant contract process was changed? Will future bidders fear that the city’s bid process will be changed just before the contract is awarded, after bidders have spent time and money preparing their bids?
While Mayor Longwell will be leaving office soon, other city officials who enabled the process — elected and others — are still in place.
This is not the way to do business, even though the government is not a business. As the Wichita Eagle editorialized: “Longwell steered the council away from its earlier decision on how to award the water plant contract — away from competitive bidding and toward shadier ways of doing business — and that is unacceptable.”
While Longwell was defeated in an election, the other party to the “shadier ways of doing business” won. That’s bad for the city right now, and bad for the city looking forward.
Should the city discard the Wichita Water Partners contract this week, as is its right? Undoubtedly, starting the bid process again would add cost and cause further delay. And, given the city’s conduct, would a new bid process attract quality proposals?
Canceling the contract and starting over is worth deliberation and consideration. Our city’s reputation and respect for process are more important than any single contract, even its largest.
Wichita Mayor Jeff Longwell says there is no corruption involving him, but this is only because of loose and sloppy Kansas and Wichita laws.
In an advertisement in the November 3, 2019 Wichita Eagle,Wichita Mayor Jeff Longwell defended himself against charges of corruption. Referring to a recent investigation by the Sedgwick County District Attorney, the ad states:
In 2018 and 2017, Bennett found I was 100% compliant. In 2016 he found only one instance where I was $21.33 over the annual $500 threshold allowed for “goods and services” received from local companies.
Here’s what the District Attorney found in his investigation:
Given the failure of Kansas Statutes Annotated 75-4301a to define “good or services,” the Mayor explained to an investigator with the Office of the District Attorney that he did not believe a round of golf constituted “goods or services.” He further explained that charitable golf outings where the entire expenditure went to charity (situations where the golf course donated their greens fees to the charity) led him to the conclusion that, because the charity received the entire donation, the golfers (including him) derived no financial benefit. As such, he did not believe it necessary to report these outings on his substantial interest form. 1
This reasoning by Longwell is hairsplitting to the extreme. What’s important is that Longwell accepted gifts from people he later steered a large city contract to. However large or small the gifts, this is wrong.
In his conclusion, the District Attorney wrote:
And while I am confident, having exhaustively researched the issue, that, as an act of entertainment, golf qualifies as “goods or services” under Kansas law, it is also true that Kansas Statutes Annotated 75-4301a, et seq., governing Substantial Interest Form filings, offers little guidance. I am not filing a class B misdemeanor under these facts.
It seems that sloppy Kansas laws are the problem, along with a mayor willing to exploit that weakness.
Does the city have any laws or regulations on this matter? Here’s an excerpt from the Wichita city code as passed in 2008 (full section below):
“[Council members] shall refrain from making decisions involving business associates, customers, clients, friends and competitors.”
We also have statutory language that reads “business associates, customers, clients, friends and competitors.” But the city attorney, in a question involving former mayor Carl Brewer, felt that these terms are not defined, and therefore the mayor and city council members need not be concerned about compliance with this law. 2
Today, city hall ethics, at least in the mayor’s chair, have not improved. It’s reasonable to conclude that people who pay the mayor to play in expensive golf tournaments are his friends. People who pay for dinner for the mayor and his wife and describe it as a social gathering (as the district attorney found) are friends. Or, maybe they just want something from the mayor and see an ersatz social relationship as a means to an end. But as we’ve learned recently, the current city attorney says council members “are left to police themselves on that city law,” according to Wichita Eagle reporting. 3
Is it true, as the mayor’s ad screams in capital letters?
THERE IS NO CORRUPTION LIKE YOU’VE BEEN LED TO BELIEVE
There is none, but only because of sloppy Kansas and Wichita laws. But under any commonsense definition, yes, there is corruption. It is not necessary for an act to be illegal to be corrupt; that it is dishonest or fraudulent conduct is enough.
Should Longwell be re-elected, can we expect reform? I don’t think it’s likely that someone will support laws criminalizing their own past behavior.
Wichita city code
Sec. 2.04.050. — Code of ethics for council members.
Council members occupy positions of public trust. All business transactions of such elected officials dealing in any manner with public funds, either directly or indirectly, must be subject to the scrutiny of public opinion both as to the legality and to the propriety of such transactions. In addition to the matters of pecuniary interest, council members shall refrain from making use of special knowledge or information before it is made available to the general public; shall refrain from making decisions involving business associates, customers, clients, friends and competitors; shall refrain from repeated and continued violation of city council rules; shall refrain from appointing immediate family members, business associates, clients or employees to municipal boards and commissions; shall refrain from influencing the employment of municipal employees; shall refrain from requesting the fixing of traffic tickets and all other municipal code citations; shall refrain from seeking the employment of immediate family members in any municipal operation; shall refrain from using their influence as members of the governing body in attempts to secure contracts, zoning or other favorable municipal action for friends, customers, clients, immediate family members or business associates; and shall comply with all lawful actions, directives and orders of duly constituted municipal officials as such may be issued in the normal and lawful discharge of the duties of these municipal officials.
Council members shall conduct themselves so as to bring credit upon the city as a whole and so as to set an example of good ethical conduct for all citizens of the community. Council members shall bear in mind at all times their responsibility to the entire electorate, and shall refrain from actions benefiting special groups at the expense of the city as a whole and shall do everything in their power to ensure equal and impartial law enforcement throughout the city at large without respect to race, creed, color or the economic or the social position of individual citizens.
Wichita Mayor Jeff Longwell urges Wichitans to reach out to him with questions through email and social media.
I’ve posed a few questions to Wichita Mayor Jeff Longwell on Facebook, usually tagging both his personal profile and campaign page. But he hasn’t answered any, despite urging citizens to contact him. Here are some recent questions:
October 17
A question for Mayor Jeff Longwell and Mayor Jeff Longwell for Reelection:
Mr. Mayor, the city may be looking at several large investments soon, like a convention center or performing arts center. How can you assure us that your influence over these items can’t be bought with a few gifts and eerily flattering emails?
—
October 18
Mayor Jeff Longwell, I have a question regarding the use of cash as an economic development incentive. You’ve said that the city does not, and will not, give cash as an economic development incentive.
Here’s a passage from December 2017 regarding the Spirit Aerosystems expansion in Wichita. Specifically, this is from the Memorandum of Understanding for Project Eclipse, Section I.B. It was contained within the agenda packet for Wichita City Council meeting for December 12, 2017.
“The COUNTY participation of $7 million US is anticipated to be available cash; the CITY participation would consist of cash in the amount of $3 million US, forgiveness of $3.5 million US in future COMPANY payments associated with the CAPITAL COMPONENT and an agreement to make additional capital improvements relating to the WATER AGREEMENT in an approximate cost of $1 million US.”
Am I reading this correctly: The city gave Spirit $3 million cash, and forgave a debt of $3.5 million?
Can you tell us how this is different from using cash as an economic development incentive?
—
October 21, 2019
A question for Mayor Jeff Longwell and Mayor Jeff Longwell for Reelection:
Where do we go to find the city’s checkbook spending? Posting this elementary and fundamental data is something that almost every governmental jurisdiction mastered years ago.
I ask because you have said you champion transparency, but I can’t find this data on the city’s website.
—
October 22, 2019
A question for Mayor Jeff Longwell and Mayor Jeff Longwell for Reelection:
Earlier this month the Center for Economic Development and Business Research at Wichita State University issued this forecast for Wichita:
“For 2020, growth is expected to be more modest, as the Wichita economy is projected to add approximately 1,600 new jobs and grow 0.5 percent.”
Do you agree with this forecast, and if yes, how do we reconcile this with your desire to “keep the momentum going?”
—
October 23, 2019
A question for Mayor Jeff Longwell and Mayor Jeff Longwell for Reelection:
Last night during the debate on KAKE, you said, “We have a diversified economy now that’s not just centered on aviation, although aviation is still important to us.”
One way to measure the diversification or concentration of an industry in a local economy is location quotients. These are calculated and provided by the Bureau of Labor Statistics. Since 2014, the concentration of employment in NAICS code 3364, aerospace product and parts manufacturing, hasn’t changed much. Can you tell us the basis of your claim that the Wichita economy is diversifying?
October 30, 2019
A question for Mayor Jeff Longwell and Mayor Jeff Longwell for Reelection:
There was unusual interest in Michigan about the Wichita airport contract decision in 2012, and the campaign bank account of Wichita City Council Member Jeff Longwell benefited financially. The Michigan party that was interested in Longwell’s political future was Walbridge, a Michigan-based construction company that partnered with Wichita-based Key Construction to bid for the airport job.
Here’s an abbreviated timeline of events:
July 16, 2012: John Rakolta, Chairman and CEO of Walbridge, and Terry Rakolta contribute $1,000 to Jeff Longwell’s campaign for Sedgwick county commission.
July 17, 2012: Wichita City Council on 5 to 2 vote found Dondlinger Hunt bid to be non-responsive. Key/Walbridge is presumptive contract winner.
July 20, 2012: Other Walbridge executives contribute $2,250 to Jeff Longwell’s campaign.
Walbridge made no other political contributions to city council members.
Mayor Longwell, do you think it is proper to accept campaign contributions that are so closely linked to a decision you made?
An ad from the Jeff Longwell for Mayor Committee contains a false claim.
An advertisement advocating the re-election of Wichita Mayor Jeff Longwell contains a claim about economic development that is false.
The ad appears in the October 20, 2019 print edition of the Wichita Eagle. Under the heading “Let’s Set the Record Straight,” we find this item: “Multiple large scale business development projects like the Cargill Downtown Headquarters which created 850+ jobs.”
Click for larger.
It’s the use of the word “create” that is false. It’s wrong because Cargill’s headquarters was located in downtown Wichita at the time it announced it would build a new headquarters in another part of downtown Wichita. 1 Whatever the number of jobs, they merely moved from North Main Street to East Douglas Avenue in the same zip code. 2
It’s possible that if Cargill’s threat to build a new headquarters in another city was genuine, we could say the city and state “retained” these jobs. But using the word “create” to describe these jobs is false. Regarding the retention of these Cargill jobs, voters can decide whether the cost was worthwhile.
Regarding the cost of retaining Cargill jobs, since Mayor Longwell raised the topic, here is a list of the known subsidies and incentives the city offered to retain the Cargill jobs. 3 As summarized in the agenda packet:
“In exchange for Cargill’s commitment, the City has negotiated the following:
Issue Industrial Revenue Bonds (Letter of Intent approved April 18, 2017) 100% property tax abatement; 5+5 year basis
Sales tax exemption
Acquisition of a 15 year parking easement for public access to the garage in the evenings and on weekends (estimated cost of $6,500,000)
Expedited plan review (50% reduction in time)
Reduced permitting fees (50%) (estimated savings of $85,000)
Assign a project manager/ombudsman for a single point of contact for the company”
The agenda packet for the city council meeting doesn’t mention this, but from the state of Kansas Cargill is likely to receive PEAK benefits. Under this program, the Kansas state withholding tax deducted from Cargill employees’ paychecks will be routed back to Cargill. 5 (Not all; only 95 percent.) Some very rough calculations show that PEAK benefits might be worth some $2 million annually to Cargill. 6
For the first year of the agreement, Cargill is expected to have 750 or more employees at an average salary of $66,814. That annual salary / 26 pay periods = $2,570 biweekly. For a family with two children (this is just a guess and could be way off), there are two withholding allowances, so $2,570 – ($86.54 x 2) = $2,397. Using the new withholding tables for married workers (another assumption), bi-weekly withholding is $48.17 + 5.7% x ($2,397 – $1,298) = $48.17 + $62.64 = $110.81. That means $2,881 annual withholding, so Cargill’s 95% share is $2,737. For 750 employees, this is an annual subsidy to Cargill of $2,052,750. ↩
There are eight major lessons for Wichita voters when they cast their ballots on or before November 5, 2019, concerning the revelations of favoritism involving the mayor, apparently a majority of the city council, and a number of Wichita businesses and businessmen concerning a proposed massive city water plant contract that is close to half a billion dollars.
The Wichita Eagle’s detailed reporting on this proposed contract, Mayor Longwell’s role deserves scrutiny at several different levels.
Let me begin with full disclosure. Both Mayor Longwell and I are registered Republicans, and also GOP precinct committeemen in our respective west Wichita precincts. The mayor is now one of the most prominent Republican mayors in the entire country. In 2012, then-city council member Longwell ran against me in the Republican primary for the Sedgwick County Commission. He lost. Subsequently, in 2015, Jeff Longwell defeated Sam Williams in the non-partisan general election for Wichita mayor.
Finally Exposing Improper City Contract Conduct
The Wichita Eagle deserves credit for researching city records following an expensive KORA records request. The paper also deserves credit for reporting the story about favoritism, cronyism, and how public-private partnerships” actually have been operating as part of the proposed new water plant at city hall.
However, this story implicitly treats this type of conduct as new. In reality, there is an extensive history of similar conduct going back for years at city hall. That raises the question, why now?
News Hole
The huge volume of space the Wichita Eagle initially provided to cover this front page, above the fold story on a Sunday paper is remarkable. It was extremely large. I doubt that the 1969 moon landing, the 9-11-2001 Islamist terrorist attacks, or pick any of the presidential campaign election results since the 1960s had as much space with as many words above the fold on the front page, and followed with two full pages inside the Sunday paper, and editorial commentary as this city hall story. As a percentage of the total news hole in the paper, a higher percentage was probably contained within this edition of the paper.
I believe that you would probably need to go back to the JFK assassination for coverage that may have included more space than this Sunday, September 29, 2019 story received.
This is quite a contrast in local news coverage from past examples of city contracts that were handled in a similar way over many years. Let’s look at why this might have occurred.
Weakened Local News Media
The news organizations in Wichita have been decimated by digitization. The digital world has dramatically changed the environment for print and broadcasting, whether it is radio or TV. All of these organizations are smaller, have reduced staffs, and lack the ability to do extensive and expensive research needed to provide any sort of investigative reporting. That is why the Eagle’s reporting on this story is remarkable since the room for news in this shrunken paper is a small fraction of what it was 10 or even just five years ago.
The Eagle’s reporting is also notable because its parent company, McClatchy Corporation (MCN), is in severe financial distress, with a corporate capital base hovering around $20 million while the firm’s indebtedness is many times larger. Recently, the Eagle announced that it was discontinuing daily publication, and will be printed six times weekly beginning in November.
McClatchy Corporation stock is now under $3 a share despite having a reverse stock-split that dramatically reduced the number of shares (1 for 10) in this financially distressed firm. To raise cash, McClatchy recently sold their Kansas City Star building. The details of this transaction that included a 15-year leaseback, indicate a company suffering severe financial difficulties.
Despite these cash flow problems, the resources needed to write this story were provided. The Wichita broadcast news media is now following, and reporting this story too.
However, this type of reporting could have occurred years ago and wasn’t. Why not?
Vote for the Leftist With A Chance
The very liberal Wichita Eagle editorial page is nothing new. When Knight-Ridder owned the eagle, the paper did an in-your-face endorsement of the liberal Michael Dukakis in the 1988 presidential election to its readers in Republican-voting Kansas.
Now the Eagle knew that their endorsement would not matter. Kansas had not voted for a Democrat for president since 1964, or before that, 1936 when Kansas’ favorite son, Alf Landon, was defeated by FDR. Despite this, they endorsed a Massachusetts leftist who went on to lose in a national landslide, as well as a Kansas landslide in this state. Even if a Republican loses a national election, Kansans overwhelming voted for Bob Dole every time his name appeared on the national election ballot.
State and local newspaper endorsements are different. This is where the Eagle’s endorsements have had more influence in races where voters may not know as much about the candidates. This is more of a factor in primaries where even less is known about candidates and their positions, than in general elections.
Now the Eagle’s defenders will take exception to this claim about liberal endorsements. Eagle defenders will claim that the paper has endorsed some Republicans, and occasionally even a conservative. It is true, this has occasionally occurred but only under a narrow set of circumstances. These non-liberal endorsements only occur when it was clear that the conservative was likely to win, and usually would win big regardless of who or how the paper endorsed. The Eagle’s editorial endorsement policy is usually to endorse the most liberal candidate with a reasonable chance to win, and has been in place for more than 40 years I’ve lived in Wichita.
As the paper’s financial and news resources have weakened, the ability to endorse has diminished with their diminishing circulation but still has substantial influence in low-turnout elections that especially include primaries, and down-ballot races.
Voice for Liberty Records It
Former Wichita Mayor Carl Brewer with major campaign donor Dave Wells of Key Construction. Evidently, Wichita city code did not prohibit Brewer from voting to give millions in contracts and subsidy to Key.The Voice for Liberty website at wichitaliberty.org pictured former Mayor Carl Brewer, a liberal Democrat, holding a big fish while standing next to a prominent local businessman David Wells of Key Construction Company. Next to this picture Weeks included a Brewer letter on city hall letterhead praising Key Construction Company and identifying it as the special construction company with city hall connections.
Bob Weeks and Voice for Liberty did everything possible to call out this situation. Interest in the local news media, from the Wichita Eagle to the broadcasters can be described in one word: crickets. Nada, nothing, ain’t going to go there was the Wichita news media reaction. But there are more city hall purchase contract shenanigans, and it is more recent.
Wichita Eagle Skews
In July 2012 the city council voted to give a large, nine-figure construction contract to a Michigan company with their select Wichita partners to replace the Wichita Airport terminal. The Michigan company and their local partners, including Key Construction, weren’t the low bidders. The lowest bidder was a Wichita construction company.
The Michigan company partnered with Key Construction and won the city council vote on this contract. Then-city council member Jeff Longwell voted to give this large contract to the Michigan/Key construction group.
The day before the city council and Longwell voted the Michigan construction company’s top management and many of their spouses made maximum donations allowed by law to the Longwell for County Commission Campaign. The day after Longwell voted to give them this $100 million-plus contract more maximum legal level donations rolled into the Longwell campaign from the Michigan company’s management and their spouses.
This all became public record when these were reported on campaign finance reports about 10 days before the election. Naturally, my campaign responded to this outrageous misconduct. Interest from the news media in general, and the Wichita Eagle, which had endorsed the less conservative candidate in this race, Longwell, had no interest in reporting on these outrageous events on their front or editorial pages.
The Wichita Eagle advertisement. Click for larger.My county commission campaign tried to buy a newspaper ad in the Eagle and publicize this outrageous financial misconduct at city hall. The Wichita Eagle’s advertising staff did everything they could to assist my campaign in this ad purchase. However, the rest of the Eagle editorial, management, and news staff attempted to censor my text, and prevent my ad from running in the form it was being used in our other campaign efforts. Eventually, my campaign did run an ad, but without all of the language that we wanted to use, in exposing this financial misconduct on the city’s airport construction contract.
This story did get to some voters, but only because my county commission campaign successfully mailed this information into voters’ hands, although roughly 40 percent of the voters had already cast ballots before my campaign material could be distributed. I beat Councilman Longwell with over 56% of the vote in the August 2012 GOP county commission primary contest.
However, when Sam Williams tried to raise this issue in the 2015 mayor’s race, it was treated as ancient history and not reported. Sadly, this history of cronyism at city hall wasn’t reported prior to the primary, and I believe that this would have made Lyndy Wells advance to the general election ballot. Most recently, this is especially true in the way the city has handled the destruction of Lawrence Dumont Stadium, and the sale of approximately 4 acres for $1 an acre around the stadium for the ownership group of an out of state, minor league baseball club. Special city favors for special people within the public-private partnership paradigm is the way municipal government operates here.
More Wichita Eagle Skews
This wasn’t the only example of city hall financial transgressions and shenanigans. In 2013 the city was involved in the city-owned land sale for the west bank apartment project, the same sort of financial shenanigans occurred. The city went with their politically favored firm, and Jeff Longwell voted with the majority to go his business buddies, in another example of this “public-private partnership.”
Sadly, Mayor Longwell continues to defend the “public-private partnerships” model for city development in this latest example of how Wichita city hall operates. This did not receive Wichita Eagle coverage like the most recent example that occurred with 3 weeks away from advanced voting in the 2019 mayor’s race begins, and roughly 5 weeks before the November 5 election day.
For many Wichitans, “public-private partnerships” is just a politically correct phrase describing cronyism, for ethically conflicted projects, for the special favors for special people environment in Wichita’s city government. Profits are privatized while loses land in taxpayer’s laps. This is what happens without clearly specified bidding, and without procedures for selecting, and protecting the low, winning bidders who meet clear project specifications.
City Purchases and City Scandals
Government scandals aren’t limited to city hall. Purchasing scandals have occurred at all levels of government.
After I joined the Sedgwick County commission in 2009, I was informed about past purchasing scandals in Sedgwick County government. These had all occurred in the last century. This occurred as I began officially reviewing county financial operations. County staff was proud of the protections and safeguards built into the county’s bidding and bid board process.
That is why almost all county bids were handled as routine, often consent agenda items. That’s how the county had created its bid board, and how there was a major effort to protect taxpayers. This transparent process treated all potential bidders fairly, whether they were local, or not; whether they knew or didn’t know county officials; and it was an open, transparent process. The city needs to move to a clear, transparent, and fair model like the county has enjoyed for several decades.
Conclusion With a Warning for the Future
Financial shenanigans have a long history in Wichita city hall. Lack of detailed news coverage of these shenanigans is a hidden story that this non-reporter is going to try and disclose for if nothing else, the historical record now. This is sad that this history has to be provided by a frustrated, non-media, Wichitan who, while I did enjoy an elevated county courthouse observation position for eight years, could only observe these city crony cases from the other side of Central Ave.
Additional details about these crony stories mentioned here are contained in the Voice for Liberty archives. This information is accessible to everyone on this site. Even the news media.
Now, this most recent example of city cronyism has received a large amount of well-deserved, and in fact remarkable, huge coverage by the Wichita Eagle. While I am a major critic of the Eagle, I will state that this paper deserves credit for breaking this story.
This must be placed in the context and contrast with often the lack of interest in the past, especially if the Eagle’s politically favored officials were involved. The major news story is not the continuing cronyism at Wichita city hall but the fact that cronyism was exposed, received major negative news attention, and now continuing news coverage.
Sadly, I expect that the bottom line is that little or nothing to change the public-private cronyism model that is encased in political concrete in city hall. This model also seems to be encased in Wichita media concrete too. Sadly, this defective economic model enhancing cronyism is likely to prevail regardless of who wins in the mayor’s election contest, or the other city council elections, November 5.
Postscript
The cronyism in Wichita and news media flaws that are discussed above are relevant but tiny compared with the egregious corruption nationally in our country. The outrages from the Clinton Crime Foundation, the recent revelations concerning the Biden overseas money schemes, the misuse of government FISA surveillance in the Russian collusion hoax, outline national abuses and governmental scandals that far exceed local government’s defects in Wichita.
My sources for these national assertions include but are not limited to the financial revelations about misconduct by both Democrats and Republicans in Peter Schweizer’s outstanding books: Secret Empire,Clinton Cash, and Extortion, are excellent. News media flaws nationally are documented by the .
Are We Rome? by Lawrence Reed is a brief, pamphlet sized outline (see Foundation for Economic Education) of our national financial and governmental challenges. Those who want to explore our national fiscal and institutional problems, I would recommend Dinesh D’Souza’s and Mark Levin’s numerous books. If we don’t get this right, Mark Steyn’s After America: Get Ready for Armageddon moves from a yellow warning light to a hideous, Venezuelan reality.
Fighting the good fight within government will be tough. Scott Walker’s Unintimidated: A Governor’s Story and a Nation’s Challenge describes the Wisconsin battle in exquisite detail. It is a valuable, but cautionary reality defenders of liberty can find incisive examples of the challenges ahead. Levin’s proposed constitutional amendments in the Liberty Amendments is also valuable reading.
Sadly, there aren’t any books like this for Kansas, let alone Wichita. Greg Jarrett has left Wichita and gone national with his excellent books. This essay is a report for the legacy of those interested in local government in the early 21st century. This also provides a report for anyone interested in the governmental legacy left for our heirs who will follow us in south-central Kansas.
The Wichita city council will consider expanding an existing TIF, or tax increment financing district.
Tomorrow the Wichita City Council will consider expanding the boundaries of an existing tax increment financing district in downtown Wichita. 1
According to city documents for this agenda item,
Expanding the District would allow the Developer to capture the additional increment generated by the increased value of the Ice House building for pay-as-you-go reimbursement of eligible TIF expenses within the TIF district. The Developer would also be reimbursed for the TIF eligible costs related to redevelopment of the Ice House building.
Further:
The project includes up to $317,170 in infrastructure improvements that would be TIF eligible. The Developer proposes that tax increment financing be used to pay for eligible redevelopment project costs on a “pay-as-you-go” basis, for site preparation and infrastructure improvements.
This may be confusing, so here it is in a nutshell: The city will be diverting up to $317,170 in future property tax paid by the developer. Instead of these taxes going to pay for operations of the city, county, and school district, these taxes will be given back to the developer.
Usually, economic development incentives such as tax increment financing, or TIF, are justified because they create jobs. For this building, according to Wichita Eagle reporting from August, the two tenants that will occupy most of the space are existing companies that are moving from other parts of Wichita.
In addition, Gary Oborney, Manager of Union Station, LLC and Ice House, LLC, the company that is receiving the benefit of tax increment financing, has made these recent campaign contributions, according to campaign finance reports filed in July:
Of note, all three are seeking reelection this year.
There is nothing illegal regarding these campaign contributions based on Wichita and Kansas law. Some jurisdictions, however, have laws known as pay-to-play. These laws may prohibit political campaign contributions by those who seek government contracts, prohibit officeholders from voting on laws that will benefit their campaign donors, or the laws may impose special disclosure requirements.
In general, these laws prohibit government officials from enriching their campaign contributors. That seems like a simple concept that makes sense.
While there is no such law in Wichita, wouldn’t citizens appreciate officials acknowledging the campaign support they have received from people with business before the council?
City of Wichita City Council Agenda for October 8, 2019. Agenda Item No. V-1, Public Hearings Considering an Expansion of the Union Station Tax Increment Financing District and Considering a Development Agreement for the Union Station Project Area 3 Plan (District I) ↩
Citizens may not have noticed that a campaign contributor to Wichita Mayor Jeff Longwell received a large benefit from the city this week.
This Tuesday the Wichita City Council voted to amend an existing lease. In a nutshell, the city council voted to lease to a tenant 8,600 square feet of retail space for $1.00 per year.
Not $1.00 per square foot per year, but $1.00 per year for all 8,600 square feet. That’s for the first four years of the lease.
Computed as rent per square foot, which is the common way to quote rent for commercial space, the rent is $0.00. Essentially free, that is.
According to the lease, the rent will increase in future years, first to $1.16 per square foot, then to $2.33.
The Block 1 garage on East William Street in 2014.The real estate is at 360 East William in downtown Wichita. It’s on the north side of William between Broadway and Topeka. This is the first floor of the Block 1 parking garage built as part of the Ambassador Hotel project.
It’s been difficult to rent this space. According to John Philbrick, the city’s real estate administrator, half of the space has been leased to two tenants. One lease is at $4 per square foot; the other at $6. According to the Weigand Commercial Retail Forecast for 2019, for total retail space in the central business district, the quoted rent was $10.65 per square foot. Across the city, class A retail space rents for $19.81, from the same source.
Who is the new tenant that will pay essentially no rent for four years, then steeply discounted rent thereafter? It is Douglas Market Development, LLC. Its manager is Sudha Tokala. According to its annual report, the only person who owns more than five percent of the company is her.
Tokala is notable for her involvement in the redevelopment of the former state office building, the former Henry’s building (which is next to the 360 East William Street retail space), and other nearby buildings.
These developments are receiving various forms of government subsidy, which might be justified for fostering economic growth in downtown.
But free (nearly free) rent? Is that really necessary to promote development in downtown Wichita?
Then, there’s this. On March 21 of this year, a company named Natman Real Estate International LLC contributed $500 to the campaign of Wichita Mayor Jeff Longwell. That’s the maximum amount allowed by law.
According to the company’s annual report, the only person who owns more than five percent of the company is Sudha Tokala. That’s the same person who is receiving four years of (almost) free rent, courtesy of the City of Wichita, Jeff Longwell, Mayor.
It’s good that buildings in downtown Wichita — or anywhere in Wichita, for that matter — are being put to productive use. We should be able to celebrate the initiative and accomplishments of entrepreneurs who do this.
But when there is such a close linkage between a campaign contribution and the conveyance of a large economic benefit — well, reasonable people will wonder. At least, they should.
Pay to play
There is no law in Wichita or Kansas prohibiting what happened here. But wouldn’t you feel better if Mayor Longwell had abstained from voting on this matter? Or if he acknowledged that he received campaign contributions from someone who is asking for a favor from the city?
Some jurisdictions have laws known as pay-to-play. These laws may prohibit political campaign contributions by those who seek government contracts, prohibit officeholders from voting on laws that will benefit their campaign donors, or the laws may impose special disclosure requirements.
In general, these laws prohibit officials from enriching their campaign contributors.
Kansas and Wichita have no such laws. In my experience, there are few elected officials in favor of a pay-to-play law.
When pursuing a large Wichita city contract, did the winning company lobby all council members, or primarily Mayor Jeff Longwell?
The role of Wichita Mayor Jeff Longwell in the awarding of the contract for the new Wichita water plant has been in the news. A recent Wichita Eagle article showed how the mayor steered the award to a company other than the company recommended by the city’s selection committee. 1
Central to the story is the relationship between the mayor and the company he favored. There was, according to Eagle reporting, a close relationship including a cash gift that was not disclosed 2 and some eerily chummy emails. 3
The mayor, however, downplayed his role. In a response from Longwell posted on the city’s Facebook page, he said he is part of a team: “A team that deliberately keeps each other in check. We question and challenge each step, and that is an intentional process designed to ensure we have the best deal for our city.” 4
Some council members agree. In the Eagle article, two council members were interviewed, Brandon Johnson (district 1, northeast Wichita) and James Clendenin (district 3, southeast and south Wichita):
Johnson and Clendenin both downplayed Longwell’s role in awarding the contract, saying the mayor is just one vote.
“You give the mayor too much credit,” Johnson said.
“Yeah, this idea that the mayor of the city of Wichita has enough power to make any decision he would like is something that I think is a misconception,” Clendenin said.
What, then, is the power of the mayor to lead or steer the council in his preferred direction?
The answer to this question holds the answer: Did the winning company (Wichita Water Partners) lobby, flatter, or gift any Wichita City Council members with anything approaching the consideration directed to Mayor Jeff Longwell?
“Before Longwell cast the deciding vote, the president of one of the Water Partners’ companies paid for Longwell to enter a $1,000-per-person charity golf tournament. … Nor did Longwell disclose the $1,000 entry fee on a state ethics form for local officials that he filed in February.” ↩
“They frequently referred to each other in emails by nicknames — Your Eminence, His Highness, Homecoming Queen, Eye Candy, Jethro and Wine Delivery Guy, after Young, the president of PEC, offered to drop off to Longwell leftover wine from a previous dinner party.” ↩
Today, city hall ethics, at least in the mayor’s chair, have not improved. It’s reasonable to conclude that people who pay the mayor to play in expensive golf tournaments are his friends. People who pay for dinner for the mayor and his wife and describe it as a social gathering (as the district attorney found) are friends. Or, maybe they just want something from the mayor and see an ersatz social relationship as a means to an end. But as we’ve learned recently, the current city attorney says council members “are left to police themselves on that city law,” according to Wichita Eagle reporting. 3
