Tag Archives: Sedgwick county government

Wichita Chamber PAC spends heavily for Hugh Nicks

The Wichita Regional Chamber of Commerce PAC dedicates a large portion of its spending on placing its crony in office.

In the contest for Sedgwick County Commission District 4, the Wichita Chamber of Commerce is spending heavily on one candidate.

Through its political action committee, the Chamber has spent $45,148 on political candidates through August 1 of this year. (There could be more spending before the August 7 primary. We don’t know.)

Of that, $36,665 was spent in favor of one candidate, Hugh Nicks. (The Chamber PAC’s finance report designates these expenditures as in favor of Nicks.)

That’s 81.2 percent spent on one candidate.

Click for larger.

Besides the spending on Nicks, the Chamber PAC sent money to legislative and statewide candidates. Most contributions were for $500, with the most notable exception being Governor Jeff Colyer at $2,000.

Really, the Chamber’s spending hasn’t been so much in favor of Hugh Nicks as it has been against his opponent Richard Ranzau.

And this campaigning by the chamber has been largely based on outright lies and absurd leaps of logic regarding Ranzau’s record. Their record is documented on the pages of Voice for Liberty. (Click here to read the articles.)

Instead of denouncing the lies and distortions told on his behalf by the Wichita Chamber PAC, candidate Hugh Nicks embraces the PAC’s endorsement.

We’d like to be able to trust the Wichita Chamber of Commerce. We want to trust our business and civic leaders. We want the Chamber and its surrogates and affiliates like Greater Wichita Partnership to succeed in building the Wichita economy.

But the Chamber is shaming itself in this campaign, and spending a lot of money to do that.

It would be one thing if the Chamber and its surrogates were successful in economic development efforts in the region. But if you’ve been following analyst James Chung — and it seems like everyone has — he’s delivered a sobering message: The Wichita economy has not been growing. “[Wichita has been] stuck in neutral for about three decades, with basically no growth, amidst the landscape of a growing U.S. economy,” he said. (In fact, in 2016 the Wichita economy shrank from the previous year, and numbers for 2017 don’t look much better.)

Chung says we need to change our ways. In his June visit he said, and the Chung Report wrote, “Every market signal points to the same conclusion: The manner in which Wichita is operating during this critical point in our history is just not working.”

When James Chung (and others) says our manner of operation is not working, it’s the Wichita Chamber of Commerce and its ecosystem that must assume a large portion of blame.

Having failed the people of Wichita, now we know just how much the Chamber wants to put Hugh Nicks on the Sedgwick County Commission.

WichitaLiberty.TV: Joseph Ashby on Kansas elections

In this episode of WichitaLiberty.TV: Wichita talk radio pioneer Joseph Ashby shares his thoughts on the upcoming Kansas primary election. We cover the Secretary of State, Governor, and Sedgwick County Commission. View below, or click here to view at YouTube. Episode 204, broadcast August 4, 2018.

Shownotes

Wichita Chamber PAC spending on Hugh Nicks

The Wichita Regional Chamber of Commerce PAC dedicates a large portion of its spending on placing its crony in office.

There is an updated version of this containing data from new reports. Click here.

In the contest for Sedgwick County Commission District 4, the Wichita Chamber of Commerce is spending heavily on one candidate.

Through its political action committee, the Chamber has spent $39,925 on political candidates through July 26 of this year. (There could be more spending before the August 7 primary. We don’t know.)

Of that, $31,442 was spent in favor of one candidate, Hugh Nicks. (The Chamber PAC’s finance report designates these expenditures as in favor of Nicks.)

That’s 78.8 percent spent on one candidate.

Besides the spending on Nicks, the Chamber PAC sent money to legislative and statewide candidates. Most contributions were for $500, with the most notable exception being Governor Jeff Colyer at $2,000.

Really, the Chamber’s spending hasn’t been so much in favor of Hugh Nicks as it has been against his opponent Richard Ranzau.

And this campaigning by the chamber has been largely based on outright lies and farcical leaps of logic regarding Ranzau’s record. Their record is documented on the pages of Voice for Liberty.

We’d like to be able to trust the Wichita Chamber of Commerce. We want to trust our business and civic leaders. We want the Chamber and its surrogates and affiliates like Greater Wichita Partnership to succeed in building the Wichita economy.

But the Chamber is shaming itself in this campaign, and spending a lot of money to do that.

It would be one thing if the Chamber and its surrogates were successful in economic development efforts in the region. But if you’ve been following analyst James Chung — and it seems like everyone has — he’s delivered a sobering message: The Wichita economy has not been growing. “[Wichita has been] stuck in neutral for about three decades, with basically no growth, amidst the landscape of a growing U.S. economy,” he said. (In fact, in 2016 the Wichita economy shrank from the previous year, and numbers for 2017 don’t look much better.)

Chung says we need to change our ways. In his June visit he said, and the Chung Report wrote, “Every market signal points to the same conclusion: The manner in which Wichita is operating during this critical point in our history is just not working.”

When James Chung (and others) says our manner of operation is not working, it’s the Wichita Chamber of Commerce and its ecosystem that must assume a large portion of blame.

Having failed the people of Wichita, now we know just how much the Chamber wants to put Hugh Nicks on the Sedgwick County Commission.

Joseph Ashby endorses Sedgwick County Commissioner Richard Ranzau

Conservative grassroots activist and pioneering radio host Joseph Ashby explains why Richard Ranzau is the best choice for Sedgwick County Commission District 4. View below, or click here to view at YouTube.

Hugh Nicks on character and respect in Sedgwick County

In the campaign for a Sedgwick County Commission position, character is an issue.

On his Facebook campaign page for Sedgwick County Commission, candidate Hugh Nicks wrote: “This election is about numerous issues, with jobs being #1. But quality of character is a strong second.” 1

A value that Hugh Nicks promotes on his campaign website and in printed material is “Debate respectfully.” 2

It’s richly ironic that Nicks makes character an issue, because his campaigning is rife with outright lies and logic-twisting distortions about his opponent Richard Ranzau.

And if Hugh Nicks values respectful debate, he could elevate the discourse by stopping the lies.

This campaign has gone beyond the usual character-bashing and self-promotion we expect.

It’s not only Nicks himself that is campaigning dishonestly. The Wichita Regional Chamber of Commerce PAC is also lying and distorting.

It’s true that the Chamber PAC is campaigning for Nicks (and against Ranzau) independently. The PAC speaks for itself.

But if Hugh Nicks is aware of the dishonest campaigning by the Chamber PAC, there’s nothing to stop him from publicly denouncing and disavowing the Chamber. That would be a positive display of character, showing he values truth more than holding political office.

(If Nicks is not aware, or if he doesn’t realize the Chamber PAC’s campaigning is dishonest, that itself is a problem.)

Instead, Nicks embraces and promotes the Chamber PAC’s endorsement.

Hugh Nicks, should he lose the election next week, will fade from public attention. But the Wichita Regional Chamber of Commerce and its PAC won’t. The Chamber will still be involved in civic life and political campaigns.

That’s too bad. The people of Wichita want to trust their business and civic leaders. We want the Chamber and its surrogates and affiliates like Greater Wichita Partnership to succeed in shepherding the Wichita economy.

But the Chamber is shaming itself in this campaign.

The record of the Hugh Nicks campaign

Allegation: On July 23, 2018, Hugh Nicks wrote on his campaign’s Facebook page: “Richard Ranzau has spent the last 8 YEARS saying ‘NO’ to our safety. Voting against support for law enforcement.” An article from the Wichita Business Journal is then linked to. The subject of the article was the proposed WSU Law Enforcement Training Center.

Truth: The article reports that Richard Ranzau and all commissioners voted to defer a decision on the training center for one week. Then, Ranzau and all commissioners voted in favor of building the center. For more on this, see Hugh Nicks and the law enforcement training center.

Allegation: Hugh Nicks wrote this on his campaign’s Facebook page, referring to Richard Ranzau: “And even questioned the need for handicapped-accessible recreational options.”

Truth: Richard Ranzau asked questions about a proposed ADA-compliant fishing dock with a cost of $53,500. The next week commissioners were told that the dock cost was just $26,162, with other things like site prep, a sidewalk, and an access road adding up to $53,500. With this additional information, Ranzau and all commissioners approved the project. For more on this, see Hugh Nicks and the Sedgwick County fishing dock.

Allegation: In a campaign mailing paid for by the Wichita Regional Chamber of Commerce Political Action Committee, Richard Ranzau is criticized: “Ranzau also suggested that Wichita annex a large local job-creating aerospace employer to generate more tax revenue.”

Truth: This claim is based on a farcical interpretation of what the commissioner actually said. Richard Ranzau did not suggest that Wichita annex Spirit Aerosystems. He merely illustrated that property taxes within the City of Wichita are higher than those outside the city. For more on this, see Wichita Regional Chamber of Commerce PAC mailing.

Allegation. On his Facebook page, Hugh Nicks accuses Richard Ranzau of “Voting against our community’s children and babies.”

Truth: Regarding the WIC program, no needy women or children went without the ability to use this program. The commission voted to reduce spending on administrative costs. The commission does not have the authority to set qualifications for participating in the program, nor does the commission set the level of benefits, that is, the amount of money and services participants receive. The county merely administers the program according to federal and state guidelines. For more on this, see Hugh Nicks: Misinformed, or lying?

Allegation: On Facebook, Hugh Nicks wrote: “He was the ONLY ‘NO’ vote for funding the Greater Wichita Partnership.”

Truth: The article Nicks uses as evidence states: “Sedgwick County Commissioner Richard Ranzau took on the Greater Wichita Partnership on Wednesday, questioning why the public-private economic development coalition needs more county money to focus its strategy.” This extra funding was to pay for a consultant to focus on a strategic plan and regional strategy. It wasn’t for funding the basic operations of GWP.

Allegation: On Facebook, Hugh Nicks wrote: “He was the ONLY ‘NO’ vote for the county’s investment at Spirit AeroSystems to create 1,000 new high-paying jobs.”

Truth: In a television interview, Ranzau said that no economic development official could tell him that the incentives were necessary for the Spirit project to proceed in Wichita. One fellow commissioner said the incentive was needed to “show Spirit we care.”


Notes

  1. Nicks For County Commission Facebook page, July 27, 2018. Available at https://www.facebook.com/NicksForCountyCommission/posts/2027095350699179.
  2. http://www.nicks4commissioner.com/, viewed August 1, 2018.

Hugh Nicks: Misinformed, or lying?

Analysis of criticism by Hugh Nicks, a candidate for Sedgwick County Commission, demonstrates that the candidate is either misinformed or lying.

On his Facebook page, Sedgwick County Commission candidate Hugh Nicks accuses Richard Ranzau of “Voting against our community’s children and babies.” As evidence, Nicks supplies a link to an article in the Wichita Eagle. 1

What’s notable about this claim is this paragraph from the article Nicks uses as evidence:

In 2015, Ranzau and other commissioners voted to cut the federal Women, Infants and Children program grant by $320,000 to $1.9 million. He said at the time that WIC could be more efficient because it was serving fewer clients. The county health department used only $1.83 million of the $2.15 million it was awarded the year before. 2

Note that the amount Ranzau (and others) voted to spend on WIC was slightly more than what was spent the year before, at a time when WIC demand was declining, as there were fewer clients. At the time, KMUW Radio reported: “Citing a recent decline in WIC participants that coincides with an increase in employees with the program, the commission’s majority voted to accept only a portion of the grant, saying the full amount wasn’t needed.” 3

So no needy women or children went without the ability to use this program. The commission voted to reduce spending on administrative costs. The commission does not have the authority to set qualifications for participating in the program, nor does the commission set the level of benefits, that is, the amount of money and services participants receive. The county merely administers the program according to federal and state guidelines.

What does Hugh Nicks think of this? In the Eagle article he uses in his Facebook post, the reporter wrote this about Nicks:

He also called the WIC program “one of the saddest things I’ve seen recently.”

“When it comes to infants and children, I’m not too worried about politics, but I am concerned about children’s health and safety,” Nicks said. “The commission has a duty to protect the most vulnerable among us, particularly when they have nowhere else to turn.”

Since no women and children lost their benefits or had them cut, it’s difficult to see why Nicks is sad.

Is he concerned that the county trimmed administrative costs? Consider some of the values listed in Nicks’ campaign literature: “Ask tough questions” and “Be conservative with finances.”

That is what the commission did, under Richard Ranzau’s chairmanship. Trimming administrative costs — no matter who is paying them — is financially conservative.

Those savings came from “asking tough questions,” a value Nicks upholds. Yet for doing that, Nicks blasts the commission, including Ranzau, as “sad” and “political.”

Voters ought to ask: Is Hugh Nicks merely uninformed, or is he lying? It might be tempting to dismiss these remarks as having been made by an uninformed candidate. But Nicks says he has been running since October 2017 so that he can learn about the issues. 4

If we eliminate “uninformed,” we’re left with “lying.”

Nearby, see Richard Ranzau speak on this issue. (Hugh Nicks and his campaign surrogates were also invited, but would not appear.) Or, click here to view at YouTube.

Following, some excerpts from the commission meeting where this matter was discussed: 5

Ms. Adrienne Byrne-Lutz, Director of the Health Department: “The Health Department has provided WIC services for well over 40 years, and the program is funded entirely through the United States Department of Agriculture that passes through KDHE.”

Later:

Chairman Ranzau said, “Our assigned caseload is going down 9.88 percent, expenditures going up 5.51 percent, and we’re actually combining two, last year there were two separate, the WIC and then the breastfeeding.”

Ms. Adrienne Byrne-Lutz said, “That’s correct.”

Later:

Chairman Ranzau said, “Historically, the past, we tend to spend less than what we’re actually given. Like the last two years, we spent about $320,000 less than what we were given to begin with?”

Ms. Adrienne Byrne-Lutz said, “Well, we don’t get a lump sum from WIC. We just get what we spend.”

Chairman Ranzau said, “But we spent $320,000 less than what we were authorized to spend?”

Ms. Adrienne Byrne-Lutz said, “Yes.”


Notes

  1. Nicks For County Commission Facebook page, July 20, 2018. Available at https://www.facebook.com/NicksForCountyCommission/photos/a.1633354576739927.1073741832.1591968844211834/2011959645546083/.
  2. Tidd, Jason. Ranzau, County Commission challengers spar over grant funding in health forum.” *Wichita Eagle, July 17, 2018. Available at https://www.kansas.com/news/politics-government/election/article215075195.html.
  3. Sandefur, Sean. Sedgwick Co. Commissioners Approve Reduced WIC Grant. Available at http://www.kmuw.org/post/sedgwick-co-commissioners-approve-reduced-wic-grant.
  4. “You may wonder why I’m announcing so early, since the Republican Primary for the County Commission seat isn’t until August 2018. The reason is simple. I like to do my homework. I want to learn about the way Sedgwick County governs, and the rationale behind the decisions that have been made. I want to learn about the issues that are most important to the people in the 4th District. I think serving as County Commissioner is too important to take an on-the-job-training approach, and I don’t want to be on a learning curve at the taxpayers’ expense.” Nicks4commissioner.com. News. October 19, 2017. Available at http://www.nicks4commissioner.com/news.html. .
  5. Sedgwick County Commission. Meeting Minutes, October 7, 2015. Available at https://sedgwickcounty.legistar.com/MeetingDetail.aspx?ID=436793&GUID=B8AC30D4-8245-4631-A804-0690C15BC9CC.

WichitaLiberty.TV: Sedgwick County Commission District 4

In this episode of WichitaLiberty.TV: Candidates and parties involved in the Republican party primary for Sedgwick County Commission District 4. Efforts were made to reach both candidates plus representatives of the Wichita Regional Chamber of Commerce PAC, as it is advertising in this contest. Only candidate Richard Ranzau agreed to appear. View below, or click here to view at YouTube. Episode 203, broadcast July 28, 2018.

Hugh Nicks and the law enforcement training center

Sedgwick County Commission candidate Hugh Nicks again falsely criticizes his opponent for living up to the values Nicks himself proclaims.

On July 23, 2018, Hugh Nicks wrote on his campaign’s Facebook page: “Richard Ranzau has spent the last 8 YEARS saying ‘NO’ to our safety. Voting against support for law enforcement.” An article from the Wichita Business Journal is then linked. 1

Nicks is a candidate for the Board of Sedgwick County Commissioners, District 4. His opponent is the incumbent Richard Ranzau.

The article the Nicks campaign uses reports on deliberations on the new Law Enforcement Training Center in the spring of 2016. 2 But: There are some problem with Hugh Nicks’ presentation and interpretation of this matter.

First, the action described in the article is “tabled.” This merely postponed a decision to another day. No one voted either yes or no.

Second, it wasn’t postponed for long. The next week the Sedgwick County Commission held a joint meeting with the Wichita City Council to discuss the training center. 3 The result of this meeting was unanimous approval, as reported by the Wichita Eagle: “Sedgwick County and the city of Wichita unanimously approved a letter of intent Tuesday to build a new training center at Wichita State University’s Innovation Campus.” 4

The next day, at the regular meeting of the Sedgwick County Commission, the training center was considered. 5 In his remarks from the bench, Commissioner Ranzau summarized: “I do believe this is the best deal we can get given the circumstances, certainly for the county, law enforcement and fire folks, it’s a tremendous step forward. I appreciate our legal council and all the work they did as well on this and the County Manager. I know there’s been a lot of discussion, a lot of stuff going on, so appreciate that, and I’ll be supportive of this motion today.”

When a vote was taken, all commissioners voted in favor.

Now that you know the entire story, reconsider the claim that Hugh Nicks made regarding Ranzau and the law enforcement training center: “Voting against support for law enforcement.”

That simply isn’t true. Not even close.

So: Why is Hugh Nicks critical of Ranzau on this matter? Why is he creating lies?

Consider some of the values listed in Nicks’ campaign literature:

“Be conservative with finances”

“Decisions have consequences. Make them wisely.”

This is what Richard Ranzau did. He favored, as you can read below, a less expensive option — the fiscally conservative option — but voted for the compromise position so that the project could proceed.

Furthermore, the Wichita Business Journal article that Hugh Nicks relies on as a source holds this: “On Wednesday, commissioners — particularly Chairman Jim Howell and Richard Ranzau — expressed concern about selecting a bid that wasn’t the lowest. MWCB has the second-highest cost of the four proposals, county documents show.”

Here, Ranzau was concerned about a potentially unwise decision, that is, not accepting the lowest bid. That’s fiscally conservative and wise.

So exactly what problems does Hugh Nicks have with Richard Ranzau?


Following, an excerpt from the minutes of the meeting of the Sedgwick County Board of Commissioners on May 18, 2016:

Commissioner Ranzau said, “As Commissioner Peterjohn alluded to, this particular attempt started basically back in July of 2015 when the mayor informed us that they would be willing to work with us on an RFP (Request for Proposal) together to move this forward. This particular effort has lasted 10 months. Now, that’s about four months longer than what I had anticipated, but never nevertheless, compared to the 30-year process that’s been going on overall, you can consider this almost lightning speed for government actions. Nevertheless, we are finally here at the point that we’re going to make a decision on the Law Enforcement Training Center, and I appreciate the effort of staff both here at the County and at the City, as well as all the Law Enforcement personnel who participated in getting us to this point.

“I think we have two options that will fit the needs. The WSU option would fit the need so would, I believe, the Commerce Building, which is over $3 million cheaper. That would be the particular one that I would have preferred to go to, because I think it does meet all of our community needs at the lowest cost possible for the taxpayers. That being said, while this may not be the most cost effective option that we could have gotten, it’s certainly probably the best we can get given the circumstances. The City of Wichita made it very clear they would not proceed with the Commerce Building. They would start all over and do it again if we selected that, so we’re left in the conundrum of what do we do? Do we say we aren’t going to do anything or do we say that we are going to work with them and see what we can do? Fortunately, we had a Chairman who had some vision and followed the big picture and said, well, if we’re going to spend more money on this facility, then what can we get for the extra expense for the taxpayers, and so we entered into discussions about the Fire Training Center, and while he was criticized for this, I think it’s an example of having a vision and not having tunnel vision.

“You’ve got to see the big picture, and he addressed two very important issues for this community in a very effective way. And so we’re not just here today to celebrate Law Enforcement Training Center, but we can celebrate the Regional Fire Training Center as well and the new partnership between the City of Wichita and Sedgwick County, and I think he should be congratulated for his vision and leadership in that area for our community. Sometimes, if you want to be a leader, have you have to be prepared to be criticized. But you continue to march forward and do the right thing because you know it’s the right thing. That’s what leadership is. Despite all the detractors and all the nay-sayers, you have a vision, you have a goal, and you execute a plan to reach that goal, and that’s admirable in this day and age.

“For those reasons, as stated, I do believe this is the best deal we can get given the circumstances, certainly for the county, law enforcement and fire folks, it’s a tremendous step forward. I appreciate our legal council and all the work they did as well on this and the County Manager. I know there’s been a lot of discussion, a lot of stuff going on, so appreciate that, and I’ll be supportive of this motion today.”

When a vote was taken, all commissioners voted in favor.


Notes

  1. Nicks For County Commission Facebook page, July 23, 2018. Available at https://www.facebook.com/NicksForCountyCommission/photos/a.1633354576739927.1073741832.1591968844211834/2019318654810182/.
  2. Heck, Josh. Sedgwick County Commission tables vote on law enforcement training center at WSU. Wichita Business Journal, May 11, 2016. Available at https://www.bizjournals.com/wichita/blog/2016/05/sedgwick-county-commission-tables-vote-on-law.html.
  3. Board of Sedgwick County Commissioners. Meeting detail, May 17, 2016. Available at https://sedgwickcounty.legistar.com/MeetingDetail.aspx?ID=486352&GUID=99EB8331-86AD-48CD-B8E5-743F2FF28AA6.
  4. Salazar, Danial. Sedgwick County, Wichita agree to build law enforcement training center at WSU. Wichita Eagle, May 17, 2016. Available at https://www.kansas.com/news/politics-government/article78051732.html.
  5. Board of Sedgwick County Commissioners. Meeting detail, May 18, 2016. Available at https://sedgwickcounty.legistar.com/MeetingDetail.aspx?ID=485988&GUID=ABD59669-B2C6-409F-8978-049DEF903C56.

Hugh Nicks and the Sedgwick County fishing dock

Sedgwick County Commission candidate Hugh Nicks criticizes his opponent for living up to the values Nicks himself proclaims.

On July 13, 2018, Hugh Nicks wrote this on his campaign’s Facebook page, referring to Richard Ranzau: “And even questioned the need for handicapped-accessible recreational options.” 1

Nicks is a candidate for the Board of Sedgwick County Commissioners, District 4. His opponent is the incumbent Richard Ranzau.

The accusation is a bit vague, but it’s pretty certain that Nicks is referring to an item from 2011 when commissioners were asked to approve spending $53,500 on what was described as “VIC’S LAKE FISHING DOCK – FACILITIES DEPARTMENT FUNDING — ADA COMPLIANCE UPGRADES.”

Examining the record, we find that yes, there is a grain of truth in Nicks’ allegation: Ranzau did question this item, but not because it was “handicapped-accessible.” Here’s what happened.

On September 28, 2011, when this item came before the commissioners, Commissioner Ranzau expressed concern with the cost of the fishing dock, given the information commissioners had been provided. So too did Commissioners Karl Peterjohn and Tim Norton. A motion was made to defer the item, and all commissioners present that day voted in agreement. 2

At the next meeting, on October 5, 2011, the item was again on the agenda. 3 At this meeting Joe Thomas, at that time Acting Director of the Purchasing Department, explained that the dock itself did not cost $53,500. Instead, the dock cost only $26,162. Other necessary items in the project included site prep ($6,920), a concrete sidewalk ($3,066), a concrete pavement parking and picnic area which includes an ADA (Americans with Disabilities Act) compliant picnic table ($6,852), an asphalt drive ($7,400), site restoration ($1,500), and “general conditions” ($1,600).

Knowing this, $53,500 seems reasonable. And Ranzau said as much in remarks after these costs were presented: “So my questions were not based on whether or not because it was an ADA dock. If you take the word ADA off of it and you come to me and say you’re going to build a $53,000 dock, I’m going to ask, do we really need to do that? Because that’s a lot of money for a dock, and so we asked for further information about how that money was going to be spent, and it clarifies a lot of information.”

After more discussion, there was a vote, and all commissioners voted in favor of building the dock, including Ranzau and Peterjohn.

Now that we know the whole story, why would Hugh Nicks be critical of Ranzau on this matter? Especially considering these values listed in bullet points on Nicks’ campaign literature:

  • Never be afraid of hard work.
  • Listen openly. Debate respectfully. Ask tough questions.
  • Be conservative with finances and generous with time.
  • Decisions have consequences. Make them wisely.

I’ve emphasized where Ranzau’s action on the fishing dock aligns with Nicks’ values. The questions Ranzau asked weren’t really “tough questions,” but they were needed and submitted respectfully. The answers helped the commissioners learn they were indeed being conservative with finances. It was a decision made wisely, with complete information.

So exactly what problems does Hugh Nicks have with Richard Ranzau?


Following, relevant Sedgwick County Commission meeting minutes.

Excerpt from the meeting of the Sedgwick County Board of Commissioners on September 28, 2011:

Chairman Unruh said, “Now we’re ready to discuss Item 6, and Commissioner Ranzau, I will ask you to lead that discussion, also.”

Commissioner Ranzau said, “Well, this is $50,000 for a boat dock, or for a dock out at the fishing lake. While I’ve had time to go out and look at the bridge at the Boys Ranch, I’ve not looked at this specific thing. And with the information I’ve been given, I’m not prepared to support this, because I’m not sure this is the best route to go. Particularly at this current status with our finances here, this seems like a lot of money for a fishing dock. And even though I’m a fisherman, I’m just not convinced. Unless I’m totally convinced it’s appropriate enough of a project, I’m not prepared to vote yes. It’s really up to the will of the Board. Today, if we vote on it today, I’ll vote no.” Chairman Unruh said, “Thank you. Commissioner Peterjohn.”

Commissioner Peterjohn said, “Thank you, Mr. Chairman. I’m concerned with the price tag of $53,500 for basically a boat dock. I have concerns on the expense here, and I realize this is the low bid, and it’s a low bid by significant margin from two other firms that provided bids, and there was a much larger list of firms that didn’t even offer. My question to ask, is if we could also put this issue off a week like we did Item number 4 without causing any difficulty?”

Mr. William P. Buchanan said, “Yes.”

Commissioner Peterjohn said, “Mr. Chairman, I’d like to see if we could get some more information on this project, just like we did on the prior item.”

MOTION

Commissioner Peterjohn moved to defer Item 6 of the Board of Bids and Contracts Regular Meeting of September 22, 2011.

Commissioner Ranzau seconded the motion.

Chairman Unruh said, “All right. We have a motion and a second. Discussion? Commissioner Norton.”

Commissioner Norton said, “I’ll support the deferral. I would like to ask a question, though. It talks about that it’s not just the boat dock that we’re, actually we’re replacing one that should be out of service. Is that correct?”

There followed more discussion, and then the vote on the deferral. All commissioners voted in favor, except for Commissioner Skelton, who was absent.

Here are the complete minutes for the dock item from the meeting of the Sedgwick County Board of Commissioners on October 5, 2011:

L 11-1028 RECONSIDERATION OF ITEM 6 OF THE MINUTES OF THE SEPTEMBER 22, 2011 MEETING OF THE BOARD OF BIDS AND CONTRACTS: VIC’S LAKE FISHING DOCK- FACILITIES DEPARTMENT.

Presented by Joe Thomas, Director, Purchasing Department. This item was deferred at the September 28, 2011 Commission Meeting.

RECOMMENDED ACTION: Approve the recommendations of the Board of Bids and Contracts.

Mr. Joe Thomas, Acting Director, Purchasing Department, greeted the Commissioners and said, “The recommendation for this item is to accept the low bid from DanCo Enterprises, Inc in the amount of $53,500.00. I’ll be happy to answer questions. We also have members of staff that are available to answer questions as well, and I recommend approval of this item.”

Chairman Unruh said, “All right. Thank you, Joe. We’ve had lots of discussion and exposure to this item. Commissioners, are there any other comment or questions that need to be answered?”

MOTION
Commissioner Norton moved to approve the recommendation from the Board of Bids and Contracts. Commissioner Skelton seconded the motion.

Chairman Unruh said, “Thank you. We have a motion and a second. Commissioner Peterjohn.”

Commissioner Peterjohn said, “Thank you, Mr. Chairman. Joe, could you give us just a quick rundown in terms of the, because the heartburn that we expressed last week was we were looking at a dock that was $53,000, and then we discussed $53,000 and change, and we discovered it was more than just a dock. And I was very much interested in getting for the record and appreciating of staff and other folks in terms of getting the bid broken down so we had a better understanding of what the numbers
actually were.”

Mr. Thomas said, “Yes. The fishing dock itself was $26,162, site prep was $6,920. Then there is a concrete sidewalk in the amount of $3,066. Then there is a concrete pavement parking and picnic area which includes ADA (Americans with Disabilities Act) compliant picnic table, $6,852. The asphalt drive was $7,400. To restore the site was $1,500, and general conditions $1,600 that made that total of $53,500.”

Commissioner Peterjohn said, “Thank you, Joe. Because Sedgwick County Park is, at the moment, currently surrounded by my district even though my best efforts to try to and get it split it up between myself and Commissioner Ranzau was not successful. But it’s a jewel, I think, that’s valuable for the entire Commission and the entire community, so I’m planning to be supportive now that we have this additional information and details. It’s a lot easier to explain the costs. It’s still an awful lot of money, but I’m comfortable with it, and I’ll be supportive.”

Chairman Unruh said, “Thank you, Commissioner. Commissioner Ranzau.”

Commissioner Ranzau said, “Thank you, Mr. Chairman. I want to make several comments here. I originally wanted to postpone this or had some issues with this for a couple of reasons. I asked the question, do we really need to do, have an ADA dock given our current situation, our financial situation, and why do we need to do this now and I also questioned the cost of it. I’ve gotten some feedback, some of it supportive of my position, some of it is not. Some people think my opposition is somehow because I oppose the ADA or people with disabilities, which could not be further from the truth. I think it’s important to remember that we have an ADA plan here at the county which I have supported voted for things previously and I will continue to do so. So my questions were not based on whether or not because it was an ADA dock. If you take the word ADA off of it and you come to me and say you’re going to build a $53,000 dock, I’m going to ask, do we really need to do that? Because that’s a lot of money for a dock, and so we asked for further information about how that money was going to be spent, and it clarifies a lot of information. I think it’s reasonable and justified to question how we spend taxpayer dollars regardless of what it’s going to be spent on.

“I think the fact that it has an ADA stamp on it doesn’t mean in my mind that it should get a pass. I have questioned things that the Sheriff Department is going to do. I’ve questioned things that the Fire Department is going to do. I’ve questioned things that the road and bridge, Public Works are going to do. It’s not because I don’t support those things, but I want to make sure that each project and each cost is appropriate. I will continue to support the ADA program, but once again, if there is a program in the future that I think the costs seems a little out of whack, I’m not going to hesitate on behalf of the citizens to ask for more information and put the vote off if necessary. I also want to point out that at this particular meeting, we actually postponed two items.

Commissioner Ranzau continued, ““It was this item, and another one was a bridge that we’re going to possibly put in down at the [Judge Riddle] Boys Ranch. I called it a bridge to nowhere, because it’s actually a bridge to get horses to the pasture. And in my mind, that was the most problematic of the two, to be honest, because it’s almost four times the cost almost as what this is. That’s the one I spent more time investigating and learning about and as you’ll notice, it’s not back on the agenda yet, so we’ll have to address that in the future. I’m not singling out the ADA program at all. I have voted for them in the past and will continue to do so, but I’ll take a close eye at every spending project we have. And like I said, there were two different items on last week’s agenda that I talked about, and the most clearly problematic was the other one, the other one that didn’t get all the attention or all the press. So I want to clarify that so that people understand where I’m coming from. As I said, I make no apologies for examining how we are spending taxpayer dollars regardless of where it comes from, if it’s ADA, police, sheriff, whatever, these are all good programs, but we just need to make sure we get the best bang for our buck. Thank you.”

Chairman Unruh said, “Thank you, Commissioner. Before we go to vote here, Mr. David Calvert is here, a leader in the community for ADA issues. Did you want to make a comment, sir?”

Mr. David Calvert, Chair, Wichita/Sedgwick County Access Advisory Board, greeted the Commissioners and said, “I would like to, Mr. Chairman, just briefly, and I’ll spare you the 30-minute…I’ve got a microphone on. I don’t know if it works. I can hear myself, but that’s about it. I am David Calvert. I’m an attorney, but I also chair and have chaired for the last six years the Wichita/Sedgwick County Access Advisory Board, started out as the Wichita Access Advisory Board to advise the city on disability issues. Sedgwick County joined this board by this board’s request in, I think 2007, and each of you Commissioners have appointees to that board and the Manager has appointees to that board as well. I will spare you the history of the Americans with Disabilities Act (ADA). I will say as part of the proactive stance this county has taken and this board has taken on compliance with the Americans with Disabilities Act, a self-evaluation and transition plan was created in 2006. Self-evaluation itself is online. It is 200 pages. I don’t necessarily urge you to read it. I will tell you that the transition plan is also online, and there is a link to those plans on the home page, again to the county’s credit.

“The list of facilities covered by the transition plan is itself six pages long. The link to the Sedgwick County Park gets you to the Sedgwick County Park’s transition plan, which is 17 pages long. The total of all of these is like a couple of thousand pages. This particular fishing dock is referenced in the transition plan, pointing out that there are no accessible docks at all in Sedgwick County Park, and each one of the projects set forth in the transition plan is given a priority rating from very high to low priority. Low priority items can be done 5 or 10 years from now, high priority and very high priority items, many which should have been done by now. This is a very high priority item, and simply gives access to people with disabilities, which covers statistically probably 75,000 people in Sedgwick County alone, and if we all live long enough, it will cover each and every one of us at one time in our lives.

“The reason everybody doesn’t end up with a disability is a lot of us simply die first, which I guess is the ultimate disability, isn’t it? But I would, this is part of this Commission’s continuing commitment to ADA compliance. People with disabilities don’t ask for special favors.

“We ask for compliance with the ADA, which simply gives people with disabilities the same right to be independent that people without disabilities have, and I think that that’s what this does. I would urge this Commission to unanimously support this bid. Thank you.”

Chairman Unruh said, “Thank you, sir. We have a couple more comments. Commissioner Ranzau.”

Commissioner Ranzau said, “Thank you, Mr. Chairman. I want to clarify a couple of things just for the public. The $53,000 we’re spending, $26,000 is for the dock itself. Now, that’s been part of my consternation that regardless whether it’s ADA compliant or not that that seems like a lot of money, but I know Mark Sroufe has done some research, and it’s possible that that actual cost will come in less than that, because he’s compared it to the price of some docks that other facilities have put into place. Also one of the big questions was why are we doing a dock now compared to, well, when you put it in the context of the overall budget. And I’ve been told that it’s a matter of priority and timing in that for the parks system, this is the high priority because, as he stated, we have no accessible docks, and it’s also a factor of timing in that the dock is getting to the point that now it needs to be replaced. So, I have to put all of those things together and then decide if this is the best way to spend money on behalf of the citizens at this time, and that’s why we took the time to ask the questions to get more information.”

Chairman Unruh said, “Thank you, Commissioner. Commissioner Skelton.”

Commissioner Skelton said, “I just wanted to concur with Mr. Calvert’s comments. I appreciate them very much. That provides the basis for my support for this project today.”

Chairman Unruh said, “Thank you, Commissioner. Commissioner Peterjohn.”

Commissioner Peterjohn said, “I’ll just state for the record I appreciate Mr. Calvert’s work on a volunteer basis for the board that works with these issues here in Sedgwick County. Thank you, Mr. Chairman.”

Chairman Unruh said, “Thank you. Commissioner Norton.”

Commissioner Norton said, “Well, I’m going to be supportive. I’ve been supportive of what we’ve done over the years for our population that have difficulties maneuvering our community. The truth is to me it’s not about ADA, although some of that is prescriptive, it’s about what’s right for our community and the population that we live with that are part of our families, a robust part of our community and doing the right thing. So it’s not about the ADA, it’s prescriptive on what we do when we remodel something. It’s about what is right for our community. We’ve developed Sedgwick County Park with a balanced playground through help from West Side Rotary [Club of Wichita]. We continue to try to make our community as vibrant as we can for all the populations. So I think it’s the right thing to do. We were going to replace that anyway, and it makes sense to replace it in a manner that will make it accessible to all citizens regardless of age and difficulty. That’s all I have, Mr. Chair.”

Chairman Unruh said, “Thank you, Commissioner. I don’t believe I can add anything to all the conversation.

Chairman Unruh continued, “I also express my appreciation to Mr. Calvert and for your leadership on our committee that addresses these issues and I also see Lindsey here, she’s our staff person who keeps us on track. We’re proud of the valuable work she does for us all, so thank you.”

Mr. Calvert said, “I want to say, Mr. Chairman, if I might, Lindsey is the Vice Chairman of our committee, and she’s the one that does all the work.”

Chairman Unruh said, “It’s good to have someone like that around, isn’t it? Mr. Manager.”

Mr. Buchanan said, “I can’t help myself. So does that mean you’re the pretty face?”

Mr. Calvert said, “Are you looking at me or are you looking…”

Mr. Buchanan said, “Yes, no, I’m looking at you, Dave.”

Commissioner Peterjohn said, “I think the Manager needs a new pair of glasses.”

Chairman Unruh said, “You were right, Mr. Manager, that was unnecessary. Madam Clerk, I think we have a motion, we’re ready to call the vote.”

There was a vote, and all commissioners voted in favor.


Notes

  1. Nicks For County Commission Facebook page, July 13, 2018. Available at https://www.facebook.com/NicksForCountyCommission/photos/a.1633354576739927.1073741832.1591968844211834/2000527696689278/.
  2. Board of Sedgwick County Commissioners. Meeting detail, September 28, 2011. Available at https://sedgwickcounty.legistar.com/MeetingDetail.aspx?ID=161070&GUID=2982541F-CC0E-4FFE-9DE3-CE1C4D59FA4D.
  3. Board of Sedgwick County Commissioners. Meeting detail, October 5, 2011. Available at https://sedgwickcounty.legistar.com/MeetingDetail.aspx?ID=162540&GUID=1CF92BD6-DF16-460A-8BFA-F1B86A5AB115.

Is the pursuit of intergovernmental grants wise?

Is the pursuit of intergovernmental grants wise? Would local governments fund certain programs if the money was not seen as “free?”

An eariler version of this article failed to distinguish Jim Howell’s position from the majority of candidates. I regret the error.

At a forum of candidates for Sedgwick County Commission, the subject of intergovernmental grants was discussed. All candidates except for current commissioners Richard Ranzau and Jim Howell were fully in favor — enthusiastic, even — of the grant system. Both Ranzau and Howell expressed skepticism of the wisdom and efficacy of the grant system.

Other candidates participating in the forum had several justifications for accepting intergovernmental grants: It’s our tax money we sent to Washington or Topeka, it’s foolish not to try to get back our tax money, the grants are already funded, the money will simply go somewhere else. There are a few problems with these lines of reasoning.

First, the grants are not “already paid for.” Since the federal government runs a deficit, we’re not paying the entire cost of government. To say that some things (program A, B, and C) are paid for, and other things (programs D, E, and F) are not paid for, is making artificial distinctions that can’t be justified.

But deficit spending (on grants or other things) makes sense to politicians who want to deliver more government services than are being paid for by current levels of taxation. Federal and state grants make sense to local politicians and bureaucrats who want to be able to say they “won” federal or state dollars, so that the county or city can spend at no one’s cost. That’s how grant money is often characterized: Spending at no one’s cost.

But politicians and bureaucrats across the nation make the same argument. We all wind up spending money at no one’s cost, so they say.

Then: We must “try to get back our tax money.” This highlights another absurdity of government grants. We pay taxes, and then hope that we win the competition to get back our money. Who developed this system? Again, politicians like to boast they “won” grant funding that has no cost. Bureaucrats thrive on the jobs and power that grants provide, both locally and at the state and federal levels. Someone has to collect the taxes, write the applications for grants, evaluate the applications, administer the grant money at the state or federal level, administer the grant money at the local level, write reports on how the grant money is spent, and then someone has to read the reports. This creates a lot of jobs for bureaucrats. It also costs a lot, which is a deadweight cost, that is, costs that provide no benefit.

(If politicians and bureaucrats in other states, cities, and counties are smarter than us, do we have a fair chance of getting our tax money back in the form of grants?)

Finally: There is evidence that intergovernmental grants accepted today result in higher taxes tomorrow. Worse, this is for spending that local governments might not choose if local government bore the entire cost. But after the grant ends and after a constituency is created, it’s difficult to stop the spending.

Following, from 2013, a presentation of research on grants and future taxation.

Federal grants seen to increase future local spending

“Nothing is so permanent as a temporary government program.” — Nobel Laureate Milton Friedman

Is this true? Do federal grants cause state and/or local tax increases in the future after the government grant ends? Economists Russell S. Sobel and George R. Crowley have examined the evidence, and they find the answer is yes.

The research paper is titled Do Intergovernmental Grants Create Ratchets in State and Local Taxes? Testing the Friedman-Sanford Hypothesis.

The difference between this research and most other is that Sobel and Crowley look at the impact of federal grants on state and local tax policy in future periods.

This is important because, in their words, “Federal grants often result in states creating new programs and hiring new employees, and when the federal funding for that specific purpose is discontinued, these new state programs must either be discontinued or financed through increases in state own source taxes.”

The authors caution: “Far from always being an unintended consequence, some federal grants are made with the intention that states will pick up funding the program in the future.”

The conclusion to their research paper states:

Our results clearly demonstrate that grant funding to state and local governments results in higher own source revenue and taxes in the future to support the programs initiated with the federal grant monies. Our results are consistent with Friedman’s quote regarding the permanence of temporary government programs started through grant funding, as well as South Carolina Governor Mark Sanford’s reasoning for trying to deny some federal stimulus monies for his state due to the future tax implications. Most importantly, our results suggest that the recent large increase in federal grants to state and local governments that has occurred as part of the American Recovery and Reinvestment Act (ARRA) will have significant future tax implications at the state and local level as these governments raise revenue to continue these newly funded programs into the future. Federal grants to state and local governments have risen from $461 billion in 2008 to $654 billion in 2010. Based on our estimates, future state taxes will rise by between 33 and 42 cents for every dollar in federal grants states received today, while local revenues will rise by between 23 and 46 cents for every dollar in federal (or state) grants received today. Using our estimates, this increase of $200 billion in federal grants will eventually result in roughly $80 billion in future state and local tax and own source revenue increases. This suggests the true cost of fiscal stimulus is underestimated when the costs of future state and local tax increases are overlooked.

So: Not only are we taxed to pay for the cost of funding federal and state grants, the units of government that receive grants are very likely to raise their own levels of taxation in response to the receipt of the grants. This is a cycle of ever-expanding government that needs to end, and right now.

An introduction to the paper is Do Intergovernmental Grants Create Ratchets in State and Local Taxes?.

WichitaLiberty.TV: Kelly Parks and property rights

In this episode of WichitaLiberty.TV: Kelly Parks joins Karl Peterjohn to discuss county and zoning issues. Parks is a former member of the Sedgwick County Commission and is a member of Kansans Advocating Responsible Zoning (KARZ). View below, or click here to view at YouTube. Episode 201, broadcast July 14, 2018.

Shownotes

KARZ meets the third Wednesday of each month at Spangle’s, Broadway and Kellogg in downtown Wichita. Meetings start at 6:30 pm for dinner with the actual meeting starting at 7:00 pm.

To learn more about KARZ, call Kelly Parks at 316-755-2757, or by mail:
KARZ
c/o John Dailey
P.O. Box 381
Valley Center, KS 67147

For Hugh Nicks, a return to the backroom deal?

Remarks from a candidate for Sedgwick County Commission call for presenting a unified front to the public.

Speaking to the Wichita Pachyderm Club, Sedgwick County Commission candidate Hugh Nicks called for leadership to end what he called “divisive behavior:” “We can’t have — we can’t have the kind of divisive behavior that we have going on right now — we just — it’s just not — it’s just not acceptable.”

His opponent in the August Republican Party primary election is Richard Ranzau, who currently holds the office.

The “divisive behavior” that Nicks objects to takes several forms, but it’s clear he thinks that the Sedgwick County Commission should present a united front: The commission should have a plan that’s agreed to, and if commissioners don’t follow the plan, there should be consequences. At least that’s the moral of a story he told members of guests of the Wichita Pachyderm Club.

That attitude is problematic. Especially so because the Sedgwick County Commission is different from a legislature. At the commission, there is no opportunity for interested parties — lobbyists and regular people — to testify before a committee as legislation is being developed. At the commission, there is no committee mark-up process in which the text of a bill is crafted and finalized. There is no committee vote that decides whether to recommend the bill to the entire legislative body.

So there really isn’t much debate or disagreement in public at the Sedgwick County Commission meetings. And when there is, it may be squelched. Last year a commissioner attempted to offer two amendments to a proposal. He was trying to generate a consensus. But the majority of commissioners wouldn’t have it, and the vote happened without considering the amendments. (See For Sedgwick County Commission, too much debate.)

It’s important that there be discussion in public, even if “divisive.” The prelude to the Kansas Open Meetings Act gives a reason why: “In recognition of the fact that a representative government is dependent upon an informed electorate, it is declared to be the policy of this state that meetings for the conduct of governmental affairs and the transaction of governmental business be open to the public.” 1

When things are not done in view of the public, we call them backroom deals, with all the well-deserved negative connotations. Here’s an example, from 2012: Sedgwick County staff and several commissioners worked out a deal to sell an unused radio tower for $280,000. Commissioners Ranzau and Peterjohn thought there should be an auction. There was an auction, and the county received net proceeds of $553,872. 2

There is already too much suspicion that backroom deals are common at the county and City of Wichita. The more important and “divisive” a matter is, the more discussion it deserves in public.

But that isn’t the attitude of candidate Nicks when he said, “It’d be like a business: I mean, if in our business when we had closed door meetings when, when we argue about how we move forward, in our, in our business, we didn’t go out in front of our employees afterwards and act the same way that we did back behind closed doors. It just doesn’t work. And if we went and acted that way in front of our customers, if we did, we wouldn’t have any customers.”

Business and government are different things. A business is accountable only to its owners and shareholders, and also to the public by acting lawfully. Other than this, a business can do what it wants. It may make decisions using any means its owners tolerate. 3

Government, however, is different. It should be accountable to the people. Sometimes — frequently — that requires “divisive” discussion and debate. And the more important the matter, the more discussion and debate — transparency — is needed.

It’s a lot easier on commissioners if the attitude is “go along to get along.” That attitude has led to a faltering Wichita economy as majorities of members of the Wichita City Council and Sedgwick County Commission have avoided debate and gone along with the advice of staff and economic development regimes. I think this is the strategy of Hugh Nicks, should he be elected to the commission.

It might be tempting to dismiss these remarks as having been made by an uninformed candidate. But Nicks says he has been running since October 2017 so that he can learn about the issues. 4

Following are excerpts of remarks of Hugh Nicks and Richard Ranzau at the Wichita Pachyderm Club, June 8, 2018.

Hugh Nicks:

In the area — in the area of leadership, uh, it always starts at the top. Yeah, it doesn’t matter what organization it is, it always starts at the top. I’ll give you just a couple of examples. Uh, when I first started out as a young guy, and I was coaching, I worked for a guy Lafayette Norwood. Maybe some of you know that name. Uh, he was the first black basketball coach — the city league’s first black coach in the city of Wichita, actually. And I worked for the man for two years and learned some hard lessons from him because he wanted to fire me a couple times.

Yeah, he wanted to fire me because one day I decided I’d run some drills that he would not have agreed upon and when we got back in the locker room and got all the kids checked out, he came and said, “I believe I’m gonna fire you.” I said, “I need that job.” It pays 6,200 dollars a year. I already said that. He said, “Well I saw what you were doing down at the other end of the court. It’s not what we agreed on. And uh, so, when we have a plan, we leave this, this office, then you’re gonna do what you’re supposed to do, and you’re not gonna counter anything that I say out on that floor because we’re a team and we’re gonna move forward.”

Uh, so that — that was one of my first lessons that I learned with regard to leadership. But I, I think it starts at the top, so here’s what I see at the county: Um, you know, we can’t have — we can’t have the kind of divisive behavior that we have going on right now — we just — it’s just not — it’s just not acceptable.

Now, it’s alright to disagree in my view. I mean, I’m probably one of the — one of the guys that disagree with and vehemently if I have a strong opinion. But it’s not done in public. You just — you just — you just can’t do that. So, if you want to have an argument with me and go back behind closed doors and have it all day long, that’s alright with me. But when we come out and we’re in front of a staff, then were gonna act differently, and we’re certainly gonna act differently in front of our constituents — in front of, in front of the, the people that we represent. It’d be like a business: I mean, if in our business when we had closed door meetings when, when we argue about how we move forward, in our, in our business, we didn’t go out in front of our employees afterwards and act the same way that we did back behind closed doors. It just doesn’t work. And if we went and acted that way in front of our customers, if we did, we wouldn’t have any customers.

So I’m a proponent, and trying to answer that question from back there in, in terms of leadership style, that we need a different leadership style in the county. Now Richard’s probably gonna take exception with that because he fights for what he believes in and I understand that. But it’s a matter of the way we go about it in my view, uh, and everything starts at the top. I mean, it starts at the top and works its way down, uh, that’s — that’s how I view that.


Notes

  1. Kansas Statutes Annotated 75-4317. Available at https://www.ksrevisor.org/statutes/chapters/ch75/075_043_0017.html.
  2. As a result of system upgrades, the county no longer needs a radio tower located near 77th Street North and Interstate 135. Pixius Communications, LLC made an offer to purchase the tower and the five acre tower site for $280,000. The county proceeded making arrangements for the sale, preparing a sales agreement contract between Sedgwick County and Pixius with a sales price of $280,000, along with several other legal documents necessary to support the sale. … But commissioners Richard Ranzau and Karl Peterjohn felt that the best way to sell the tower was through an auction. … The result of the auction? A Florida company offered $610,000. After a sales commission ($55,000) and half of closing costs ($1,128), the county will net $553,872. That’s almost twice the price the county manager and two commissioners were willing to sell the tower for. See Weeks, Bob. Sedgwick County tower sale was not in citizens’ best interest. Available at https://wichitaliberty.org/sedgwick-county-government/sedgwick-county-tower-sale-was-not-in-citizens-best-interest/.
  3. It’s true that some government officials say we must run government like a business. They usually mean that until they are held to the standards of accountability the private sector faces. Then, things are different. Accountability is avoided. (The non-discussion of expenses of the Intrust Bank Arena is an example of evading business-type accountability by members of the Sedgwick County Commission. See Intrust Bank Arena loss for 2017 is $4,222,182.)
  4. “You may wonder why I’m announcing so early, since the Republican Primary for the County Commission seat isn’t until August 2018. The reason is simple. I like to do my homework. I want to learn about the way Sedgwick County governs, and the rationale behind the decisions that have been made. I want to learn about the issues that are most important to the people in the 4th District. I think serving as County Commissioner is too important to take an on-the-job-training approach, and I don’t want to be on a learning curve at the taxpayers’ expense.” Nicks4commissioner.com. News. October 19, 2017. Available at http://www.nicks4commissioner.com/news.html. .

WichitaLiberty.TV: Sedgwick County Election Commissioner Tabitha Lehman

In this episode of WichitaLiberty.TV: Sedgwick County Election Commissioner Tabitha Lehman briefs Bob and Karl about the upcoming elections. View below, or click here to view at youTube. Episode 200, broadcast June 30, 2018.

Shownotes

  • Website for Sedgwick County Election Office. Includes how to register, sample ballots, options for voting, where to vote, when to vote, and other information.
  • Telephone number for the election office: 316-660-7100.

From Pachyderm: Commission Candidates Hugh Nicks and Richard Ranzau

From the Wichita Pachyderm Club: Sedgwick County Commission candidates Richard Ranzau and Hugh Nicks. These are Republicans vying for the District 4 nomination. Recorded June 8, 2018.

The primary election is August 7, 2018. District 4 includes downtown and north-central Wichita, Park City, Maize, and Valley Center.

Shownotes

Sedgwick County jobs

Sedgwick County had fewer jobs in 2017 than in 2016.

The Bureau of Labor Statistics has released new data for the Quarterly Census of Employment and Wages. This represents data for the complete year of 2017, on a preliminary basis.

From December 2016 to December 2017 Sedgwick County employment was level, changing by 0.0 percent. According to the BLS news release, that ranked 317 of the 347 largest counties.

Showing monthly value with strong seasonality, and 12-month trailing moving average. Click for larger.
Using the monthly average job count, Sedgwick County had 248,772 (monthly average) jobs in 2016. For 2017 that fell to 247,022, a decline of 1,750 jobs or 0.7 percent.

As can be seen in the chart of change in job levels, 2017 continues a trend of slower job growth in Sedgwick County, with the growth trend turning negative.

Nonetheless, Sedgwick County leaders, as well as other local leaders, proclaim momentum in the local economy. Earlier this year Sedgwick County Commissioner David Dennis penned a column for the Wichita Eagle praising the county’s efforts in economic development. 1 Dennis is also chair of the commission this year. 2

In his column, the commissioner wrote: “Economic development is a key topic for the Board of County Commissioners and for me in particular. Right now we have a lot of momentum to make our community a more attractive place for people and businesses.”

In the same column he also wrote “There is a lot of momentum and forward movement in our community right now and I’m encouraged to see what we can achieve as a team.”

Looking at these statistics, it’s difficult to see how anyone could come to these conclusions.

According to BLS, “The Quarterly Census of Employment and Wages (QCEW) program publishes a quarterly count of employment and wages reported by employers covering more than 95 percent of U.S. jobs, available at the county, MSA, state and national levels by industry.” Also “The primary economic product is the tabulation of employment and wages of establishments which report to the Unemployment Insurance (UI) programs of the United States. Employment covered by these UI programs represents about 97% of all wage and salary civilian employment in the country.”

Source of data is Bureau of Labor Statistics, Quarterly Census of Employment and Wages, specifically series ENU2017310010: “All Employees in Total Covered Total, all industries for All establishment sizes in Sedgwick County, Kansas, NSA.” Data through December 2017.


Notes

  1. David Dennis. Sedgwick County part of drive to strengthen area workforce. Wichita Eagle, March 5, 2018. Available at http://www.kansas.com/opinion/opn-columns-blogs/article203559734.html.
  2. Weeks, Bob. Sedgwick County’s David Dennis on economic development. Available at https://wichitaliberty.org/sedgwick-county-government/sedgwick-county-david-dennis-on-economic-development/.

Wichita unemployment rate falls

For April 2018, the unemployment rate in the Wichita metropolitan area fell, and the number of jobs grew.

Today the Bureau of Labor Statistics released employment statistics for metropolitan areas through April 2018. These are numbers that are not seasonally adjusted, so it’s not very useful to compare any month with the month before. But it is appropriate to compare a month with the same month of the prior year.

The good news, sort of: The unemployment rate for the Wichita metro area declined to 3.6 percent in April 2018, down from 3.9 percent in April 2017. The number of unemployed persons also declined by 8.9 percent for the same period.

These numbers should be good news. But these two statistics don’t exist in a vacuum. Specifically, the unemployment rate is the ratio of the number of unemployed persons to the labor force. While the number of unemployed persons fell, so too did the labor force. It declined by 2,676 persons over the year, while the number of unemployed persons fell by 1,071. This produces a lower unemployment rate, but a shrinking labor force is not the sign of a healthy economy.

Click for larger.

A further indication of the health of the Wichita MSA economy is the number of nonfarm jobs. This rose by 100 from April 2017 to April 2018, an increase of 0.03 percent. This follows a decline of 0.5 percent from March 2017 to March 2018.

For April 2018, BLS reports:

Unemployment rates were lower in April than a year earlier in 305 of the 388 metropolitan areas, higher in 63 areas, and unchanged in 20 areas, the U.S. Bureau of Labor Statistics reported today. Eighty-eight areas had jobless rates of less than 3.0 percent and three areas had rates of at least 10.0 percent. Nonfarm payroll employment increased over the year in 312 metropolitan areas, decreased in 70 areas, and was unchanged in 6 areas. The national unemployment rate in April was 3.7 percent, not seasonally adjusted, down from 4.1 percent a year earlier. 1

Sources:
Bureau of Labor Statistics. Table 1. Civilian labor force and unemployment by state and metropolitan area, not seasonally adjusted. Available at https://www.bls.gov/news.release/metro.t01.htm.
Bureau of Labor Statistics. Table 3. Employees on nonfarm payrolls by state and metropolitan area, not seasonally adjusted. Available at https://www.bls.gov/news.release/metro.t03.htm.


Notes

  1. Bureau of Labor Statistics. Metropolitan Area Employment and Unemployment Summary. Wednesday, May 30, 2018. Available at https://www.bls.gov/news.release/metro.nr0.htm.

Wichita in ‘Best Cities for Jobs 2018’

Wichita continues to decline in economic vitality, compared to other areas.

NewGeography.com is a joint venture of Joel Kotkin and Praxis Strategy Group. Its annual “Best Cities for Jobs” project ranks metropolitan areas according to growth in employment.

Of 422 metropolitan areas considered, Wichita ranked 383, dropping 28 spots since the previous year.

Among 100 medium size metropolitan areas, Wichita ranked 93, dropping 5 spots from the previous year.

NewGeography.com uses employment data from the United States Bureau of Labor Statistics from November 2006 to January 2018. 1 Last year’s publication contains a more detailed explanation of how the rankings capture current year-growth, mid-term growth, and momentum. 2

In the analysis for 2017, Wichita had also fallen in ranking.

Wichita has momentum, they say

Despite this news, Wichita leaders are in denial. Recently Greater Wichita Partnership president Jeff Fluhr told a group of young people this:

From the innovation campus at Wichita State University and development along the Arkansas River in downtown, including a new baseball stadium, to the conversations happening now about a new convention center and performing arts facility, Fluhr said the momentum is pushing to keep Wichita on par with the development of other communities around the country.

That development, which has in recent years expanded to incorporate the entire region, is a critical component to attracting and retaining talent — the exact kind of talent in the ICT Millennial Summit crowd. 3

In January Wichita Mayor Jeff Longwell said, “It’s hard to find a time when we’ve had more momentum.” 4

In March Sedgwick County Commissioner David Dennis penned a column for the Wichita Eagle praising the county’s efforts in economic development. 5 Dennis is also chair of the commission this year. In his column, the commissioner wrote: “Economic development is a key topic for the Board of County Commissioners and for me in particular. Right now we have a lot of momentum to make our community a more attractive place for people and businesses.”

At the same time, the Wichita Eagle editorialized: “Wichita’s economy struggled to rebound from the last recession, which held the city back. But there have been positive economic signs of late, including a renewed focus on innovation and regional cooperation. … There also is a sense of momentum about Wichita. Yes, challenges remain, but the city seems to have turned a corner, with even greater things ahead.”6

In announcing his candidacy for Sedgwick County Commission, Wichita city council member Wichita City Council Member Pete Meitzner (district 2, east Wichita) said, “We have enjoyed great progress and growth during my two terms as a City Council member and I plan to do my part to assure Sedgwick County is part of this continued success.” 7

Given all this, it ought to be easy to find economic data supporting momentum, progress, and growth. Besides the NewGeography.com report cited above, let’s look at some other indicators.

Personal income. For the Wichita metropolitan statistical area, personal income in 2016 rose slightly from the 2015 level, but is still below the 2014 level. In real (inflation-adjusted) dollars, personal income fell in 2016. 8

Personal Income Summary, Wichita, through 2016. Click for larger.

Population. In 2000 Wichita was the 80th largest metropolitan area. In 2017 its ranking had fallen to 89. See Wichita metropolitan area population in context for more on this topic.

Trends of business activity in downtown Wichita. Click for larger.
Downtown Wichita. There’s been a lot of investment in downtown Wichita, both public and private. But since 2008 the trend is fewer business establishments, fewer people working downtown, and lower earnings generated in downtown Wichita. Almost every year these numbers are lower than the year before. This is movement in the wrong direction, the opposite of progress. There may be good news in that the number of people living downtown may be rising, but business activity is declining. 9

Employment. While officials promote the low Wichita-area unemployment rate, there is an alternative interpretation. First, the good news: The unemployment rate for the Wichita metro area declined to 3.9 percent in March 2018, down from 4.2 percent in March 2017. The number of unemployed persons declined by 8.3 percent for the same period. 10

Is Wichita’s declining unemployment rate good news, or a byproduct of something else? The unemployment rate is the ratio of the number of unemployed persons to the labor force. While the number of unemployed persons fell, so too did the labor force. It declined by 3,367 persons over the year, while the number of unemployed persons fell by 1,056. This produces a lower unemployment rate, but a shrinking labor force is not the sign of a healthy economy.

A further indication of the health of the Wichita-area economy is the number of nonfarm jobs. This number declined by 1,200 from March 2017 to March 2018, a decline of 0.4 percent. This follows a decline of 0.7 percent from February 2017 to February 2018.

Of the metropolitan areas in the United States, BLS reports that 308 had over-the-year increases in nonfarm payroll employment, 72 (including Wichita) had decreases, and 8 had no change.

Growth in output. The worst news, however, is that the Wichita-area economy shrank from 2015 to 2016. In real (inflation-adjusted) dollars, the Wichita metropolitan area gross domestic product fell by 1.4 percent. For all metropolitan areas, GDP grew by 1.7 percent. Since 2001, GDP for all metropolitan areas grew by 29.3 percent, while Wichita had 12.3 percent growth. 11

Wichita MSA employment, annual change. Click for larger.
The GDP figures are for 2016, and figures for 2017 won’t be available until September. So what happened in 2017? Could 2017 be the genesis of momentum to drive our economy forward?

While GDP figures aren’t available, jobs numbers are. For the year 2016, total nonfarm employment in the Wichita metropolitan area grew by 0.62 percent. For 2017, the growth rate was 0.56 percent — a slowdown in the rate of job growth. These job growth figures are far below the rate for the nation, which were 1.79 and 1.58 percent respectively.

Annual change in job growth, Wichita and USA through 2017. Click for larger.

Furthermore, Wichita’s job growth rate in 2016 was lower than 2015’s rate of 1.07 percent. This is momentum in the wrong direction. Nearby charts illustrate. 12

What to do?

The failure of the Wichita-area economy to thrive is a tragedy. This is compounded by Wichita leaders failing to acknowledge this, at least publicly. While we expect people like the mayor, council members, and the chamber of commerce to be cheerleaders for our city, we must wonder: Do these people know the economic statistics, or do they choose to ignore or disbelieve them?

From private conversations with some of these leaders and others, I think it’s a mix of both. Some are simply uninformed, while others are deliberately distorting the truth about the Wichita economy for political or personal gain. The people who are uninformed or misinformed can be educated, but the liars are beyond rehabilitation and should be replaced.


Notes

  1. “The methodology for our 2018 ranking largely corresponds to that used in previous years. We seek to measure the robustness of metro areas’ growth both recently and over time, with some minor corrections to mitigate the volatility that the Great Recession has introduced into the earlier parts of the time series. The ranking is based on three-month rolling averages of the U.S. Bureau of Labor Statistics’ ‘state and area’ unadjusted employment data reported from November 2006 to January 2018.” 2018 How We Pick The Best Cities For Job Growth. Available at http://www.newgeography.com/content/005973-2018-how-we-pick-best-cities-job-growth.
  2. 2017 How We Pick The Best Cities For Job Growth. Available at http://www.newgeography.com/content/005618-2017-how-we-pick-best-cities-job-growth.
  3. Daniel McCoy. ICT Millennial Summit: Wichita is having a moment. Wichita Business Journal, November 30, 3017. Available at https://www.bizjournals.com/wichita/news/2017/11/30/ict-millennial-summit-wichita-is-having-a-moment.html.
  4. Heck, Josh. Emerging Leaders panel offers insight into eco-devo strategies. Available at https://www.bizjournals.com/wichita/news/2018/01/11/emerging-leaders-panel-offers-insight-into-eco.html.
  5. David Dennis. Sedgwick County part of drive to strengthen area workforce. Wichita Eagle, March 5, 2018. Available at http://www.kansas.com/opinion/opn-columns-blogs/article203559734.html.
  6. Wichita is moving forward. March 1, 2018. Available at http://www.kansas.com/opinion/editorials/article135573253.html.
  7. Bill Wilson. Wichita council member unveils bid for county commission. Wichita Business Journal, November 30, 3017. Available at https://www.bizjournals.com/wichita/news/2018/02/13/wichita-council-member-unveils-bid-for-county.html.
  8. Weeks, Bob. Wichita personal income up, a little. Available at https://wichitaliberty.org/wichita-government/wichita-personal-income-up-2016/.
  9. Weeks, Bob. Downtown Wichita business trends. Available at https://wichitaliberty.org/wichita-government/downtown-wichita-business-trends/.
  10. Weeks, Bob. Wichita unemployment rate falls. Available at https://wichitaliberty.org/economics/wichita-unemployment-rate-falls-2018-03/.
  11. Weeks, Bob. Wichita economy shrinks. Available at https://wichitaliberty.org/economics/wichita-economy-shrinks/.
  12. In some presentations these figures may differ slightly due to data revisions and methods of aggregation. These differences are small and not material.

Wichita metropolitan area population in context

The growth of population in Wichita compared to other areas.

Several Wichita city officials have noted that the population of the City of Wichita now exceeds that of Cleveland. This, to them, is a point of pride and sign of momentum in Wichita.

It’s true, at least the population facts. For 2016, the U.S. Census Bureau estimates the population of Wichita as 389,902 and Cleveland as 385,809. From the 2010 census, Wichita’s population was 382,368; Cleveland’s 396,815. 1

That Wichita moved up in population rank is more due to Cleveland losing 11,006 people (2.8 percent loss) while Wichita gained 7,534 people (2.0 percent gain).

Looking only at city population, however, misses the fact that the Cleveland metropolitan statistical area population is 2,058,844 compared to the Wichita MSA at 645,628, a difference of 3.2 times.

For most types of economic and demographic analysis, metropolitan statistical areas (MSA) are preferred to cities proper. The Census Bureau notes: “The general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core.” 2

Wichita officials usually recognize this and have started to emphasize the importance of the region (the MSA), not just the city. Many of our civic agencies have named or renamed themselves like these examples: Greater Wichita Partnership, Wichita Regional Chamber of Commerce, Blueprint for Regional Economic Growth, Metropolitan Area Planning Commission, Wichita Area Planning Organization, Regional Economic Area Partnership of South Central Kansas, South Central Kansas Economic Development District.

Further, there is more economic data available at the MSA level (compared to the city level) from agencies like Bureau of Labor Statistics and Bureau of Economic Analysis. This data includes important measures like employment, labor force, unemployment rate, gross domestic product, and personal income.

City boundaries are still important, as Wichita, for example, can’t impose property or sales taxes outside the city limits. Nor can it write laws affecting neighboring towns or the county.

But not even schools respect city boundaries, with several large suburban school districts (Andover, Maize, Goddard) reaching far into the city limits of Wichita.

While Wichita may be the 50th largest city, its rank is not as high when considering metropolitan areas. Worse, its rank is slipping as other areas grow at a faster clip. In the 1990 and 2000 census, Wichita was the 80th largest metro area. By 2010 Wichita’s rank had fallen to 82, and for 2017 the rank is 89.

Growth of Wichita MSA population and economy

Wichita officials incessantly talk about momentum. Using a misguided measure of regional size and growth (Wichita is larger than Cleveland!) is one example.

Unfortunately, there are many other examples. Recently Wichita’s mayor spoke of a “thriving city” and that “we’re going to continue our growth pattern.” 3

Recently Greater Wichita Partnership president Jeff Fluhr told a group of young people this:

From the innovation campus at Wichita State University and development along the Arkansas River in downtown, including a new baseball stadium, to the conversations happening now about a new convention center and performing arts facility, Fluhr said the momentum is pushing to keep Wichita on par with the development of other communities around the country.

That development, which has in recent years expanded to incorporate the entire region, is a critical component to attracting and retaining talent — the exact kind of talent in the ICT Millennial Summit crowd. 4

In January Wichita Mayor Jeff Longwell said, “It’s hard to find a time when we’ve had more momentum.” 5

In announcing his candidacy for Sedgwick County Commission, Wichita city council member Wichita City Council Member Pete Meitzner (district 2, east Wichita) said, “We have enjoyed great progress and growth during my two terms as a City Council member and I plan to do my part to assure Sedgwick County is part of this continued success.” 6

But these pictures — thriving, growth, progress, momentum — just aren’t true, according to the best statistical evidence. Wichita is shedding jobs. 7 In 2016 the Wichita economy shrank. 8 Our labor force is declining. 9 Sedgwick County shows a decline in employees and payroll in 2016. 10

Finally, as can be seen in the nearby chart of population growth in the Wichita metro area and a few other examples. Wichita’s growth rate is low, and is slowing. (The other metro areas in the chart are our Visioneering peers plus a few others.)

It is terribly unfortunate that the Wichita economy is not growing. What’s worse is the attitude of our city leaders. If we don’t confront our problems, we probably won’t be able to solve them.

In an interactive visualization I’ve prepared from census data, you can compare growth in metropolitan statistical areas. Click here to access the visualization.

Wichita and other population growth. Click for larger.


Notes

  1. Annual Estimates of the Resident Population for Incorporated Places of 50,000 or More, Ranked by July 1, 2016 Population: April 1, 2010 to July 1, 2016. Source: U.S. Census Bureau, Population Division. Release Date: May 2017
  2. Available at https://www.census.gov/programs-surveys/metro-micro/about.html.
  3. Weeks, Bob Mayor Longwell’s pep talk. Available at https://wichitaliberty.org/politics/mayor-longwells-pep-talk/.
  4. Daniel McCoy. ICT Millennial Summit: Wichita is having a moment. Wichita Business Journal, November 30, 3017. Available at https://www.bizjournals.com/wichita/news/2017/11/30/ict-millennial-summit-wichita-is-having-a-moment.html.
  5. Heck, Josh. Emerging Leaders panel offers insight into eco-devo strategies. Available at https://www.bizjournals.com/wichita/news/2018/01/11/emerging-leaders-panel-offers-insight-into-eco.html.
  6. Bill Wilson. Wichita council member unveils bid for county commission. Wichita Business Journal, November 30, 3017. Available at https://www.bizjournals.com/wichita/news/2018/02/13/wichita-council-member-unveils-bid-for-county.html.
  7. Weeks, Bob. Wichita unemployment rate falls. Available at https://wichitaliberty.org/economics/wichita-unemployment-rate-falls-2018-03/.
  8. Weeks, Bob. Wichita economy shrinks. Available at https://wichitaliberty.org/economics/wichita-economy-shrinks/.
  9. Weeks, Bob. Why Wichita may not have the workforce. Available at https://wichitaliberty.org/wichita-government/why-wichita-may-not-have-the-workforce/.
  10. Weeks, Bob. Business patterns in Kansas counties. Available at https://wichitaliberty.org/economics/business-patterns-in-kansas-counties/.

Wichita unemployment rate falls

The unemployment rate in the Wichita metropolitan area fell. So too did the number of jobs.

Today the Bureau of Labor Statistics released employment statistics for metropolitan areas through March 2018. These are numbers that are not seasonally adjusted, so it’s not very useful to compare any month with the month before. But it is appropriate to compare a month with the same month of the prior year.

The good news, sort of: The unemployment rate for the Wichita metro area declined to 3.9 percent in March 2018, down from 4.2 percent in March 2017. The number of unemployed persons also declined by 8.3 percent for the same period.

These numbers should be good news. But these two statistics don’t exist in a vacuum. Specifically, the unemployment rate is the ratio of the number of unemployed persons to the labor force. While the number of unemployed persons fell, so too did the labor force. It declined by 3,367 persons over the year, while the number of unemployed persons fell by 1,056. This produces a lower unemployment rate, but a shrinking labor force is not the sign of a healthy economy.

A further indication of the health of the Wichita MSA economy is the number of nonfarm jobs. This number declined by 1,200 from March 2017 to March 2018, a decline of 0.4 percent. This follows a decline of 0.7 percent from February 2017 to February 2018.

Of the metropolitan areas in the United States, BLS reports that 308 had over-the-year increases in nonfarm payroll employment, 72 had decreases, and 8 had no change.

Sources:
Bureau of Labor Statistics. Table 1. Civilian labor force and unemployment by state and metropolitan area, not seasonally adjusted. Available at https://www.bls.gov/news.release/metro.t01.htm.
Bureau of Labor Statistics. Table 3. Employees on nonfarm payrolls by state and metropolitan area, not seasonally adjusted. Available at https://www.bls.gov/news.release/metro.t03.htm.

Intrust Bank Arena loss for 2017 is $4,222,182

As in years past, a truthful accounting of the finances of Intrust Bank Arena in downtown Wichita shows a large loss.

The true state of the finances of the Intrust Bank Arena in downtown Wichita are not often a subject of public discussion. Arena boosters cite a revenue-sharing arrangement between the county and the arena operator, referring to this as profit or loss. But this arrangement is not an accurate and complete accounting, and it hides the true economics of the arena. What’s missing is depreciation expense.

There are at least two ways of looking at the finance of the arena. Nearly all attention is given to the “profit” (or loss) earned by the arena for the county according to an operating agreement between the county and SMG, a company that operates the arena. 1

This agreement specifies a revenue sharing mechanism between the county and SMG. For 2107, the accounting method used in this agreement produced a profit, or “net building income,” of $1,000,829 to be split (not equally) between SMG and the county. The county’s share was $300,414. 2

While described as “profit” by many, this payment does not represent any sort of “profit” or “earnings” in the usual sense. In fact, the introductory letter that accompanies these calculations warns readers that these are “not intended to be a complete presentation of INTRUST Bank Arena’s financial position and results of operations in conformity with accounting principles generally accepted in the United States of America.” 3

Intrust Bank Arena Payments to Sedgwick County. Click for larger.
That bears repeating: This is not a reckoning of profit and loss in any recognized sense. It is simply an agreement between Sedgwick County and SMG as to how SMG is to be paid, and how the county participates.

A much better reckoning of the economics of the Intrust Bank Arena can be found in the 2017 Comprehensive Annual Financial Report for Sedgwick County. 4 This document holds additional information about the finances of the Intrust Bank Arena. The CAFR, as described by the county, “… is a review of what occurred financially last year. In that respect, it is a report card of our ability to manage our financial resources.”

Regarding the arena, the CAFR states:

The Arena Fund represents the activity of the INTRUST Bank Arena. The facility is operated by a private company; the County incurs expenses only for certain capital improvements or major repairs and depreciation, and receives as revenue only a share of profits earned by the operator, if any, and naming rights fees. The Arena Fund had an operating loss of $4.3 million. The loss can be attributed to $4.5 million in depreciation expense.

Financial statements in the same document show that $4,522,596 was charged for depreciation in 2017.

Trends of events and attendance at Intrust Bank Arena. Click for larger.
If we subtract SMG payment of $300,414 from depreciation expense, we learn that the Intrust Bank Arena lost $4,222,182 in 2016.

Depreciation expense is not something that is paid out in cash. That is, Sedgwick County did not write a check for $4,522,596 to pay depreciation expense. Instead, depreciation accounting provides a way to recognize and account for the cost of long-lived assets over their lifespan. It provides a way to recognize opportunity costs, that is, what could be done with our resources if not spent on the arena.

But not many of our civic leaders recognize this, at least publicly. We — frequently — observe our governmental and civic leaders telling us that we must “run government like a business.” The county’s financial report makes mention of this: “Sedgwick County has one business-type activity, the Arena fund. Net position for fiscal year 2017 decreased by $4.3 million to $156.3 million. Of that $156.3 million, $146.0 million is invested in capital assets. The decrease can be attributed to depreciation, which was $4.5 million.5 (emphasis added)

At the same time, these leaders avoid frank and realistic discussion of economic facts. As an example, in years past Commissioner Dave Unruh made remarks that illustrate the severe misunderstanding under which he and almost everyone labor regarding the nature of spending on the arena: “I want to underscore the fact that the citizens of Sedgwick County voted to pay for this facility in advance. And so not having debt service on it is just a huge benefit to our government and to the citizens, so we can go forward without having to having to worry about making those payments and still show positive cash flow. So it’s still a great benefit to our community and I’m still pleased with this report.”

The contention — witting or not — is that the capital investment of $183,625,241 (not including an operating and maintenance reserve) in the arena is merely a historical artifact, something that happened in the past, something that has no bearing today. There is no opportunity cost, according to this view. This attitude, however, disrespects the sacrifices of the people of Sedgwick County and its visitors to raise those funds. Since Kansas is one of the few states that adds sales tax to food, low-income households paid extra sales tax on their groceries to pay for the arena — an arena where they may not be able to afford tickets.

Any honest accounting or reckoning of the performance of Intrust Bank Arena must take depreciation into account. While Unruh is correct that depreciation expense is not a cash expense that affects cash flow, it is an economic reality that can’t be ignored — except by politicians, apparently. The Wichita Eagle and Wichita Business Journal aid in promoting this deception.

The upshot: We’re evaluating government and making decisions based on incomplete and false information, just to gratify the egos of self-serving politicians and bureaucrats.

Reporting on Intrust Bank Arena financial data

In February 2015 the Wichita Eagle reported: “The arena’s net income for 2014 came in at $122,853, all of which will go to SMG, the company that operates the facility under contract with the county, Assistant County Manager Ron Holt said Wednesday.” A reading of the minutes for the February 11 meeting of the Sedgwick County Commission finds Holt mentioning depreciation expense not a single time. Neither did the Eagle article.

In December 2014, in a look at the first five years of the arena, its manager told the Wichita Eagle this: “‘We know from a financial standpoint, the building has been successful. Every year, it’s always been in the black, and there are a lot of buildings that don’t have that, so it’s a great achievement,’ said A.J. Boleski, the arena’s general manager.”

The Wichita Eagle opinion page hasn’t been helpful, with Rhonda Holman opining with thoughts like this: “Though great news for taxpayers, that oversize check for $255,678 presented to Sedgwick County last week reflected Intrust Bank Arena’s past, specifically the county’s share of 2013 profits.” (For some years, the county paid to create a large “check” for publicity purposes.)

That followed her op-ed from a year before, when she wrote: “And, of course, Intrust Bank Arena has the uncommon advantage among public facilities of having already been paid for, via a 30-month, 1 percent sales tax approved by voters in 2004 that actually went away as scheduled.” That thinking, of course, ignores the economic reality of depreciation.

Even our city’s business press — which ought to know better — writes headlines like Intrust Bank Arena tops $1.1M in net income for 2015 without mentioning depreciation expense or explaining the non-conforming accounting methods used to derive this number.

All of these examples are deficient in an important way: They contribute confusion to the search for truthful accounting of the arena’s finances. Recognizing depreciation expense is vital to understanding profit or loss, we’re not doing that.


Notes

  1. Management Agreement between Sedgwick County and SMG. August 1, 2007. Available here.
  2. Minutes of the Sedgwick County Commission, February 14, 2018.
  3. Management Agreement between Sedgwick County and SMG.
  4. Sedgwick County. Comprehensive Annual Financial Report of the County of Sedgwick, Kansas for the Year ended December 31, 2017. Available at https://www.sedgwickcounty.org/media/39501/2017-cafr.pdf.
  5. Ibid.