Think voters in Kansas City will get a say on whether the city issues billions in bonds to build a new airport terminal? Think again, and be prepared to foot the bill.

Kansas City’s recent past is full of rosy development projects that did not pan out; KCP&L (Kansas City Power & Light) is chief among them. As a result, the city — and the taxpayers who fund city operations — are on the hook for about $13 million each year. Funds used to support the project are being diverted from other worthy causes.

Aviation Department Administrator Mark VanLoh says: “One common misconception the city must overcome: People think Kansas City will have to raise taxes to pay for a new terminal. It will not.” Maybe, maybe not.

Let’s review airport revenue. Dave Helling wrote in the Kansas City Star about how a new terminal would struggle to raise revenue:

There aren’t a lot of ways airport users could generate that kind of revenue. Ticket sales are already taxed, and air travel here is slumping. The airlines could pay more in rent, but other airports would pounce if the cost at KCI gets too high.

Indeed, VanLoh has admitted in press interviews that airports in Branson, Mo., and Wichita, Kan., are already taking market share from Kansas City because they are paying airlines to land there. Increasing rents or landing fees are not a realistic option.

If the airport is unlikely to be able to generate the revenue needed to support those bonds, can’t we turn to the federal government for help? VanLoh says “no,” telling the Star that large-scale federal participation in the project faces headwinds.

If the city were to issue $1.5 billion in revenue bonds in order to pay for the new terminal, it certainly would require a vote of the people. (Note that the $1.5 billion they are now considering is already a 25 percent increase over where we started, at $1.2 billion.) But what of Kansas City’s 2nd District City Councilman Ed Ford’s assertion in November that the project is “going to happen regardless of whether our citizens want it to happen”?

It turns out that not all bonds require voter approval. These bonds, known as Special Obligation Bonds, are not considered debt in the same way as other bonds and therefore require no public vote. Kansas City uses them all the time, and in fact is preparing to issue some this year to pay for the streetcar. Special Obligation Bonds were created to address a city’s immediate need — say, a broken water main — when it does not have the resources to fix it or the time to seek a vote. Kansas City issued two such bonds in 2012 amounting to $75 million that funded computer upgrades for the city’s revenue collectors, garages, and the refinancing of the ill-fated Citadel Plaza project.

Unlike revenue bonds, which do require a public vote, these bonds are normally secured by property. In this case, the Aviation Department may secure the $1.5 billion debt with the airport itself. While the city may not have to raise taxes, as VanLoh says, it is well within reason that the city will have to cover those bond payments from the general fund just like we cover KCP&L.

Welcome to the Kansas City Power and Flight District.

One of the reasons I shop on Amazon almost weekly is because of the company’s impeccable customer service. (I also like that I can read reviews from strangers on everything before I buy, allowing them to justify my purchases when they say, “This is the best EVER, you need this!”)

Successful business owners will tell you that paying attention to their customers’ needs is ultimately what drives the business. Yet, sometimes customer desires can be pushed aside, even when they are observable and understandable.

There is strong opposition to the proposed new Kansas City Airport terminal, from both Kansas City residents and politicians. A recent poll showed that two-thirds of respondents were opposed to a single terminal, and groups such as Save KCI are getting involved in the discussion. Despite the vocal opposition, however, the city supports moving forward with a study to lay out plans for the new terminal.

If the study were coming from a completely unbiased source, I would say, study away. But many times these studies report what the strong political interests want, instead of truly depicting the best options for a project.

This case is different from some other public projects because ultimately, the success of the airport depends on how many people use it. If the new terminal is not user-friendly and travelers do not like it — they are less likely to fly as often. Right now, people love the convenience of the airport. If it becomes a hassle to fly, the city must remember that people do have other options. It is counteractive to waste billions, as we did in Saint Louis, on a new terminal that attracts less business than the supposedly outdated one.

Tony’s Kansas City has had the story about some in Kansas City who are considering changes to the city charter in order to strengthen the role of the mayor. This is as good an opportunity as any to remind people of all the work we have released on the issue of local government in Kansas City.

My main charter recommendation for Kansas City government is to remove the peculiar designation that makes each at-large councilmember also represent one of the council districts. There are benefits to at-large elections (lower overall spending), but they are reduced if you make at-large officials also represent a district. Just let the at-large reps serve at-large and the district reps serve the districts.

It will be interesting to see what concrete proposals come out of this. Will the role of the mayor be increased at the expense of the council or the city manager? It is basically impossible to implement a true “strong mayor” system like Chicago (or, for a Missouri example, like Florissant — neither is really a good comparison) and maintain an influential city manager. But there certainly can be smaller steps taken to strike more of a balance. I cannot wait to hear what those steps may be.

Despite my young age, I will admit that I have a pretty bad memory. That is why I am meticulous about organizing everything and recording notes so I do not lose track of what I have done. When I do forget, I simply search back through my notes and files — problem solved. Call me crazy, but I did not think I was unique in doing this.

Well, Jefferson City City Council members just decided to hire an outside party to complete an in-depth study of transportation system needs and resources. But a couple of years ago, the city hired a $150,000 consultant to do just that. The mayor aimed to justify a new study, suggesting that things have changed enough to warrant a new study. Yet, when asked whether he had reviewed the last study’s recommendations, he said, “It’s been a long time … I don’t want to go there today … I plan on it.” How does he know a new study is needed, if he does not even know what the last one said?

Apparently, many city council members were not even aware of the previous study. I would think a review of that one is necessary before they, or the mayor, can decide what action needs to be taken next. As Bill McClellan has pointed out in some old St. Louis Post-Dispatch columns, we are not doing anyone any favors (besides consultants) when governments pay for expensive studies that sit on the shelf, only to be duplicated again after they are lost under a layer of dust.

The cost of a new consultant was not mentioned in the article, but the city should evaluate the previous study and other options before throwing money into something that may simply reproduce previous work. I have to wonder, is there no one who works for the city (perhaps the Transit Division director) who is capable of making transit recommendations?

At a recent Kansas City Transportation and Infrastructure Committee hearing, Aviation Department Director Mark VanLoh walked the committee through a slide show featuring lots of exciting computer graphics of an airport that does not exist and likely never will. VanLoh said the images were merely “conceptual;” no architect is bound by them. Yet several news outlets have picked them up to illustrate what the proposed terminal could look like. This future airport is as real as the fabled emperor’s new clothes.

Why is fanciful airport art an issue? Kansas City officials argue that we need a shiny new terminal because we are losing market share to other airports in the region, such as Branson, Mo., and Wichita, Kan.

On KCPT’s Week in Review program (comments begin at 5:07), Scott Parks of KMBZ 98.1, in a courageous act of honesty, questions the whole concept of a city “losing flights” to another city. He says:

Maybe I struggle against this panel mentally. I don’t understand how Kansas City is losing flights. Airlines are a business. If people want to fly to Kansas City for business, for pleasure, to visit family, whatever, they’re going to fly to Kansas City. I heard the argument this week that we’re losing flights to Columbia, we’re losing flights to Branson, we’re losing flights to Wichita. Well if I live in Seattle and I have family that lives in Kansas City, I’m not flying to Wichita and then driving three hours to Kansas City. I don’t understand how flights that were supposed to be coming to Kansas City are now going to Wichita or Branson.

The conversation immediately moved to the cost of security and Kansas City International Airport (MCI); no one addressed Parks’ concern.

Just like the old ministers in Hans Christian Anderson’s “The Emperor’s New Clothes,” Parks states the obvious — doing so almost apologetically. But he is exactly right. If proponents want to argue that the airport is unattractive as a hub — a place where people make connections to other flights but not itself a destination — a shiny new terminal will not address that problem. It will only exacerbate the problem if it results in higher costs to airlines who are already being lured elsewhere with cash.

Week in Review was rife with those same slick computer-generated images that were shown at the transportation committee meeting. Those images are meant to appeal to emotions. The Kansas City Star reported that the aviation department has contracted with an outside public relations firm for $117,000. Are presentations to the Kansas City Council and the public already focused on selling slick and colorful images rather than answering substantive questions? The city council’s committee hearing suggests the answer is “yes.”

Kansas City Mayor Sly James has called for an “adult discussion about the facts,” and that is good. But he and others on the City Council have yet to make their case that the Emperor is not naked.

Last week, I testified in favor of Missouri House Bill 914 in Jefferson City. This latest attempt at Tax Increment Financing (TIF) reform is simply a cap on the size of individual TIF projects along with a total cap on the amount any one company (or “anchor tenant” in the definitions) can receive via TIF in Saint Louis, Saint Charles, and Jefferson Counties. I think the cap is justified and necessary. More importantly, I hope we can take this good step toward TIF reform in our state (even though the substitute version of the bill limits this reform to the Saint Louis region).

The language in the bill is admirably simple, maybe too simple. Clever lawyers will have little difficulty in getting around the caps and what I hope is the plain intent of the law. With that in mind, I hope the Missouri General Assembly strongly considers some of the language changes we suggested in the testimony. Those changes are not designed to change the bill, but simply to buttress the limits from the inevitable municipal end-runs.

The Missouri Municipal League (MML) testified against the TIF reforms, which restored order to the universe after the incident the previous week when the MML and I actually agreed on something.

The Missouri Supreme Court enabled Saint Louis City to award a staggering $390 million TIF (Tax Increment Financing) package to NorthSide Regeneration (a.k.a. Paul McKee).  This is not only the largest TIF in Saint Louis history — it is the largest TIF ever awarded in the state of Missouri.

Do you think that pumping hundreds of millions of taxpayer dollars to one developer is the key to successful North Side revitalization? I would love to be wrong on this, but can someone please give me evidence (economic, historic, etc.) where this type of huge subsidy to one developer working hand-in-hand with government planners has managed to successfully revitalize a community? Some say that McKee’s dream is worth a shot despite a high uncertainty that it will work; I obviously do not agree in this case. But who knows, maybe McKee will be to Saint Louis what Baron Haussmann was to the rebuilding of Paris.

If you are not familiar with the NorthSide project saga, I recommend reading this short article in St. Louis Magazine to get the Cliff’s Notes version.

Columbia is forging ahead with plans to create a new passenger terminal, despite a significant drop in airline service.

Here is a quick recap of recent events. This past year the airport enjoyed service from American Airlines, Delta, and Frontier Airlines. But American Airlines is now the only commercial airline staying in Columbia, as Delta already left the market, and Frontier exits in May.

Consulting firm Parsons Brinckerhoff will provide design services for the new terminal for $38,000. In a recent press release, Parsons Brinckerhoff hypes the new terminal and defends the need, stating that “Columbia Regional Airport has been experiencing growth and has seen an increase in the number of commercial airline service offerings.”

After reading that, I literally double-checked the date of the press release to confirm that it indeed said March, 28, 2013, and not 2012. While it is technically true that the airport has increased commercial airline service offerings, the statement leaves off the very important second half of that statement — the growth has stopped, and service offerings are much lower than they were a year ago.  It is like saying George Bush is president. It was true, at one point in time, but you are not going to find him at the White House today.

Still, city leaders seem confident with their multi-million dollar plan. The Columbia City Council decided on Monday to transfer $1.2 million away from other city projects to fund the terminal, and plan to allot another $18.7 million to the project in the 2014 Capital Improvement Plan, in hopes that the federal government will agree to contribute a large portion of the total cost.

Show-Me Institute Policy Researcher Kacie Galbraith wrote yesterday that much has been said in Missouri about economic development that attracts the so-called creative class.

But over the past decade, the “cool” cities have not seen any faster job or population growth than cities dominated by non-creative industries. The fastest employment growth has been in areas such as Houston, Dallas, Oklahoma City, and Omaha. The main employment in those cities is not in the cool, creative sector, but in industries such as oil and manufacturing. And, even the rapidly growing “cool” cities, such as Raleigh and Austin, are not transit-centered places.

It is the same in Kansas City. Rail proponents are so frustrated about nearly a dozen defeats at the ballot box that they contrived a special taxing district, permitted only the residents of that district to vote, and used the result of that vote to commit the city to at least a $100 million rail line project.

A lawsuit against the city’s scheme was dismissed because of its timing, and the city has started collecting the tax. Now the blog Tony’s Kansas City is claiming that some are preparing for a ballot petition to stop the project. If the Kansas City City Council is unable or unwilling to defer to the clearly and repeatedly stated will of the people, then voters are completely within their rights to act on their own with a petition.

On Tuesday, people in both Saint Louis City and County will vote on an increased parks sales tax to support changes to the Arch grounds and increased funding for local parks. In my opinion, the various arguments for and against it are all washed away by one fatal flaw in the proposal. The state legislature, when it authorized the tax to go before the voters, did not exempt TIF funds from the sales tax. That means in most — if not all — of Saint Louis City and County, the almost 200 TIF districts will be able to keep half of the new sales tax revenues — supposedly going to parks and the Arch — and use it for themselves.

The infuriating thing is that when the legislature passed the bill allowing this tax last year, they also passed the enabling legislation for a new parks tax in Kansas City as part of the very same bill. And for that KC tax, they exempted the new sales tax from TIF. So this was not some oversight by legislative supporters of the tax in Saint Louis. If they knew to exempt the KC tax from TIF, they could (and should) have done so for the Arch tax. The fact that they did not can only be seen as an effort to help developers and other consistent TIF users by adding this new tax to the pot of money available for subsidies. That alone makes this new tax a bad idea for Saint Louis.

Things seem to be moving very quickly in the debate about the future of the North Kansas City hospital. Lawsuits, amendments to bills, new trustees, late-night rule changes . . . the only thing missing is the Turk trying to finish off Don Corleone. This is unfortunate, because the discussion about the potential future sale, transfer, or privatization of the hospital is extremely important.

Needless to say, rushed changes to the board rules and amendments added to bills after public hearings are completed does not make for good public policy. A judge upheld the right of the city to add new members to the hospital board, but I have heard that the current board members changed the board rules to require a super-majority vote on certain actions before the new members could be appointed. That might be clever, but it is hardly admirable.

Legislation taking the hospital away from the entity that has owned it for decades would be a very dangerous  precedent, terrible policy, and wrong, all combined. Maybe it is just me, but I think taking away ownership of the hospital from the city is, you know, a bad idea. The city owns the hospital. It has always owned the hospital. The city should be able to do what it wants with the hospital, be that sale, privatization, closure, expansion, whatever. (Let’s be clear, however: under every legitimate scenario, the hospital is going to continue operating.)

I am no lawyer, but I have to imagine the courts will continue to side with the city here. That makes legislative changes the best option for hospital activists opposed to any structural changes. It would be extremely unfortunate if a pro-free- market legislature made an exception in this case and blocked the city from even considering something such as privatization, which most members of the legislature would usually support.

In 2005, city leaders in Kansas City sought and received a temporary property tax levy to fund health services. Eight years later, as the nine-year tax is set to expire, city leaders and health care executives want to extend it. Kansas City’s Northeast News reported that the levy helps fund:

. . . two hospitals, Truman Medical Centers and Children’s Mercy, along with six area non-profit health care providers like Samuel U. Rodgers Health Center, Northland Health Care Access, KC Care Clinic, among others, to offset the cost of indigent health care. In addition, approximately $10 million of the levy goes toward the city’s ambulance service. Truman Medical Centers receives the bulk of the levy, about $26.4 million.

The tax, amounting to about $43 on each $100,000 of assessed property, is in addition to an existing health care tax that runs about $94 on each $100,000 of assessed property. However, The Kansas City Star reports that the tax may not be necessary because of the Affordable Care Act. The Star reported earlier this year that Obamacare:

. . . is supposed to improve health coverage for thousands of the city’s poor, they say. By next year, most Americans must carry health insurance or face a tax penalty, a mandate that should mean Truman and the health centers will get an infusion of cash from newly insured patients.

The city is probably correct to be skeptical that Obamacare will live up to its ambitions — it seems to be falling short on its promises — but Kansas Citians are hardly able to foot the bill for a long and growing list of taxes.

Voters’ mailboxes are being filled with mailers about why we should vote to extend the tax. Perhaps that money could be spent on an audit that identifies how to more efficiently spend existing funds. Instead of spending $10 million in tax dollars on ambulances, perhaps some of that service can be privatized, as is the case elsewhere in Missouri. Without being “smarter with the money,” does anyone doubt that in nine years the city will seek to extend this temporary tax again?