Taxpayers bilked $30,000 for bogus Maplecrest Extension Study
Posted by Mike Sylvester - 5/14/08 @ 4:13 pm - Filed Under Featured
Everyone reading this post should really take the time to read the 26 page study that the taxpayers of Allen County paid $30,000 for.
Let me start by saying that we should really look at how Allen County selected a vender and a price for this study. We paid $1,153.85 per page for a study that has no basis in reality whatsoever.
I would argue that Jeff Pruitt and I could prepare a more accurate study at less cost… (Note this is just my opinion and Jeff Pruitt may disagree)
I cannot analyze this study in just one post, so this will be the first of multiple posts.
This study was prepared based on several completely erroneous assumptions that were not listed in the study, these include:
1. All residential development, all commercial development, and every job created in the next eleven years within the TIF districts near the project would be created 100% due to the Maplecrest Road Extension. For example if an existing business in the region expands this is assumed to be 100% due to the Maplecrest Road Extension.
2. The study assumes that the entire region will be developed and that this development will occur within eleven years. The study does not mention how they determined eleven years or how they determined that the entire region would be developed.
If the entire region is actually developed then that means there will be less development in other parts of the county (including downtown). I call this phenomonen Economic Rearrangement and it is not Economic Development. Nowhere in the study does it discuss the negative effects development of the magnitude they are projecting would have on the rest of Allen County (especially downtown).
3. The study assumes that 1530 acres will be developed residential at a density of 2 - 3 single family homes per acre. This equates to 3825 single family housing units being built over eleven years in this small area of Allen County. This is absurd and can be easily discounted with some simple research. Unfortunately for the taxpayers the consultants paid $30,000 to prepare this study did not feel it necessary to check the total number of housing starts in Allen County as far as I can tell.
The area encompassed by the TIF districts is extremely small in comparison to Allen County at large, in fact, this area encompasses far less then .01 percent of the counties total land area. In 2006 there were a total of 1167 single family housing permits issued in Allen County (Note not all of these permits were utilized in 2006). From 2002 - 2006 there were an average of 1739 single family housing permits issued in all of Allen County.
Housing starts in 2007 and 2008 are down significantly; however, for the sake of my simple comparison I will assume that there are 1739 housing starts per year in Allen County over the next eleven years. I will further assume that 90% of these permits are converted into single family homes. This would equate to 1565 single family homes per year being built in all of Allen County.
Per this study they are projecting 3825 single family homes will be built in these TIF districts over an eleven year period. Per my simple assumptions above I project there will be 17,215 single family homes built in all of Allen County over the next eleven years.
In other words, this study predicts that 22.2% of all of the single family homes built in Allen County over the next eleven years will be built in the TIF Districts near the Maplecrest Road Extension.
I guess that they are predicting that thousands of families will be building in these TIF’s rather then building in NACS and SACS. In fact there is no mention of school districts in this study at all which I find disturbing. Many families in Allen County choose to live in NACS and SACS rather then FWCS and EACS. I wonder if our out-of-town consultants considered school districts in their study at all?
4. Worse yet this study factors in these housing starts as economic development that will occur due to the Maplecrest Road Extension. In my opinion there is a relatively stable demand for housing in Allen County. It is determined by many factors; however, I feel that housing demand is somewhat predictable and that the same amount of residential housing will be needed in Allen County whether Maplecrest is extended or if it is not extended.
I like to call this phenomenon Economic Rearrangement. If in fact all of the houses they predict will be built are built in the Maplecrest TIF districts; then that exact same number of houses will not be built in other parts of Allen County! How on Earth can any reasonable person call that Economic Development? (Note all local Economic Development officials I have spoken to and most of our elected officials consistently do call Economic Rearrangement such as this Economic Development.)
Also realize that if 3825 new houses are built in TIF districts then the property taxes from these houses will be captured by the TIF districts and will not be used to pay for police protection, fire protection, schools, etc. This will erode the tax base of the other parts of Allen County and cause property tax revenue used to pay for the above services to decrease. No mention of this is made in this study.
The above section in italics is incorrect. My comments about housing are true since they are counting on this number of housing starts to create construction jobs; however, my comments about residential property being captured by a TIF are not true.
Is there anyone reading this blog who thinks 3825 homes will be built over an eleven year time period in the TIF districts near the Maplecrest Road Extension?
Good grief,
Mike Sylvester
Comments
24 Responses to “Taxpayers bilked $30,000 for bogus Maplecrest Extension Study”
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Mike:
Excellent analysis! My one question to the commissioners is: If this project is SOOOO good for the community, why not let it go to referendum?
Mike, you’re not being fair. They can guarantee growth in that area because the city will offer subsidies and abatements until someone decides to develope there.
By the way, regarding the cost of these subsidies and abatements that will almost certainly be apart of that growth, what page was that covered on in their report?
Mike, I am not criticizing you for missing anything because there is A LOT in that study to question. Your analysis of housing is spot on. Here are some other concerns:
1. The $78 million benefit they ascribe to construction spin-off is not an argument in favor of this project, even if you accept the premise. It’s an argument in favor of spending $48 million on construction ANYWHERE. If you want that sort of benefit then why not, oh, just an idea, fix the rest of the bridges in Allen County? I’d argue that such an expenditure would be better anyway - Maplecrest is a HUGE project and is likely to be too big for many of our local contractors, so the job would probably end up going to a national scale contractor (good for the people who own motels, not so good for the rest of us). Doing a bunch of smaller projects would be better for the local economy since those jobs are more likely to be awarded to local employers. In any event, the construction benefit is a non-argument for Maplecrest.
2. The industrial development along Adams Center is the crux of the reason for this project, in my opinion. And although it is significantly shorter in miles to drive from Adams Center &, say, Seiler Road, to 469 via Maplecrest than it is via Tillman or 930, the drive time is a wash according to my estimation. (I like to call this the Goldner Model and involves complex measurements, long division, and Google Maps. It’s because I like you, Mike & Jeff, that I am not charging you $30,000 for this analysis.) So I’m not sure that the Maplecrest bridge is the the be-all for eastside industrial development that it might have been had the bridge been built 40 years ago.
3. Another concern is really more of a question but the way I read the study in 2011, 2012 and 2013 there will be less than $200,000 per year available in the Major Bridge fund to fix anything since nearly $2 million/year is dedicated to debt service. I cannot believe that I am reading this correctly and hope that someone will explain to me that Allen County is not planning to do something like that.
That is enough for now. You people aren’t paying me enough to keep writing this report :-) and dinner is ready.
So, Economic Rearrangement equals Economic Development?
Wow. You learn something new every day.
1- Miles distance and drive time are far from the same. Using the interchange at Paulding or Tillman for 469 is far closer then using Maplecrest to 469. There are no stop lights or stop signs on either Paulding or Tillman to reach 469 from Adams Center Road. There will be no less then seven stop signs/stop lights between the river and 469 on the north side.
Stop and starts eat more fuel then maintaining an even speed. Again Tillman Road/Paulding road route would be far better then Maplecrest Road.
2- Four brigdes will increase the number of accidents during the winter because of snow and ice. These bridges are running north-south which have a higher number of weather related accidents then east-west.
3- As I stated before the data for the study was supplied by Allen County. The company preparing the report used their data and crunched it into a software program and produced the results. (As the accounting people would say, “Bad numbers in bad numbers out!”)
4- Ms. Goldner is point on with regards to the spending of the Bridge Fund.
As for the housing. Let me see, every person in Allen County for the next number of years will only want to build a home in that area. They will want to have a clear view of Mt. Adams Center Land Fill and be within ear shot of heavy industrial operations that already are in the area.
Anyone want to tackle the retaining of high water on the Maumee that the “at grade” road will cause back into the city of Fort Wayne? I would think every city council member would not ask but demand an answer via a Corp of Engineers study before signing off on anything related to this project. Pointing fingers in 3 years is not going to work for the council members.
JQ, since I have a nearly neurotic aversion to back-tracking when I drive, I was somewhat surprised when I saw that the Goldner Model (a.k.a. Google Maps) showed exactly what you are saying - going south to Tillman is faster than taking 930 (either directly or via Moeller Road). And although the distance along Maplecrest (assuming a bridge) is 1/2 of the mileage of the existing options, the speed differential is so significant that the new route is a minute or two slower than Tillman Road. Given that these are all estimates and averages, I think we conclude that a difference of a couple of minutes is no difference at all, but it is interesting that the lower number is the existing route using Tillman.
Thank you for agreeing. I see so many advantages to the Tillman/Paulding road. Fewer lights now or in the future, reduced chances of auto accidents, allow for heavy truck traffic a pretty direct route to 469, and reduce truck traffic through New Haven with upgraded Tillman or Paulding Road.
To upgrade Tillman to even 5 lanes right now would cost only a fraction of the cost of the Maplecrest Ext.
Then again there is something behind this entire project that just has not flushed out to us poor taxpayers. Our dollars are being eaten up by high fuel costs, higher food costs, higher health care and for city utility users facing annual increases for the massive sewer project. Yet, our local elected officials seem to think we a flush with extra cash at this time!
Look at the newspaper on Sunday there are few good paying job openings in the area. Unemployment is highter then the goverment tells us because once you uneployment comp. runs out you are no longer figured into the unemployed.
The city and county are facing massive short falls in the next few years and neither one has figured out what they are going to do to trim things. We keep hearing that every operation is operating on the bare min. now. So taxes just to keep things going are going to go up some how or some way. There are no free rides!
My guess is if this project goes through anyone supporting it will have a hard time winning any future election that needs the voters of St. Joesph Township. Once they see the mess that is caused on Maplecrest Road that they either travel daily or cross daily will be well remembered the next time they cast a vote. I know I will.
I hope you all tune in to the meting tomorrow. Some tough questions will be coming. You have only scratch the surface.
I can not remember who wanted my e-mail but you now have it. Oh was it J. Q….my numbers are listed in every book and if you call my office they will sometimes give out my cell. Which is 402.1835. I will discuss and debate any issue feel free to call it. Enjoyed the comments.
I think everyone’s analysis here is right on the money yet from different angles and perspectives. Collectively this message needs to get out to the county councilmembers and so I’m glad to see Darren Vogt show up and leave a comment.
I’m even more excited to see that the council will have a number of difficult questions ready for the commissioners.
Mike, I don’t believe residential housing can be captured by the TIF but I could be wrong about that. Either way your point on the number of houses is well taken. It proves the anecdotal point I made in my earlier post that this study is, how shall I say it, rubbish.
I want to make it clear that I do not support this project but I do support it going to a referendum. If voters in this county think this is a wise investment then I can live with that. What I can’t live with is the commissioners using half-baked studies to circumvent the new referendum law. It shows complete disrespect for taxpayers, state legislators and the governor.
Where are the people willing to defend this study? Speak up! I know you’re reading so let’s hear it - convince us this is wise.
Jeff..You are correct, residentual can not be captured in a TIF. One major component not in th e TIF is tax abatements…tune in to see what that does.
[…] opportunity for the community then that would be one thing, but the editorial uses the completely bogus consultant study as their justification: ALLEN COUNTY Council members skeptical about spending $54 million to build […]
Thank you Mr. Vogt. I know with your day job and working on council if very demanding. Then to find time to visit a blog and share your thoughts falls under beyond the call of duty!!
Jeff, I agree with you. If they would leave this go to the voters then I would approve of such. Then again it would provide us a chance to let the public know much more then the report provides. We could hold are own townhall meetings around the county.
Like Ms. Goldner, Mr. Vogt you deserve a tip of the hat. Thank you
The weblogs are once again on it. I am jumpin right on this bandwagon as it represents the citizens as taxpayers and heads down the high road.
I plan to request a copy of the procurement specifications.
The contract itself between the consultant contractor and the County of Allen is a legal commitment to produce a document per the specs of the Request for Proposals or the specs of a justified Sole Source procurement.
If the specs are sound and ask for an unbiased feasibility study, then based on the veracity of the comments here and elsewhere, this product is non-compliant and the consultant should formally apologize and do it over.
To submit a bill now for $30,000 (or presumably less in this case) would be an “issue.”
If the consultant did not document the findings with survey data, interviews, comparisons with similar projects, demographic and transportation projections and more, then the contractor did not comply with the contract and should NOT be paid. Of course, this assumes that the Specs were sound and asked for a feasibilty unbiased study and further called for the usual feasibility study methods and analysis be used.
We will see, and let’s hope they haven’t submitted an invoice yet.
It’s great to see an intelligent discussion of this issue in a blog. It’s even better with elected officials participating. Go Karen!
Does the proposed Maplecrest bridge lie within the Fort Wayne city limits? If it does, then this will be just another one of the bridges that the County has unilaterally abdicated responsibility for maintaining in the future.
It doesn’t seem fair to force this future burden on the taxpayers of the city without allowing them (or at least City Council) to have a say in the matter.
Phil,
If I read the maps in the correct manner this project includes property that lies in Fort Wayne, New Haven, and unincorperated Allen County.
I am not sure juse where each of the four bridges are located outside of one going over the Maumee. Maybe someone knows and can inform us.
I was at the meeting today- though I left before it ended (I left at 12:15PM).
There were many questions regarding the study- MOST interesting:
1. the Commissioners instructed the contractors to assume there would be NO tax abatements given in this area.
2. The Commissioners told the contractors to ASSUME that this would be the area where Fort Wayne, Allen County and New Haven would be pushing for all future economic development (meaning we would quit trying to develop out by the airport, out northwest, etc.)
Ridiculous.
Wow.
Thanks Kevin. So our city leadership has stated to the County that the industrial park off cook road will set for what ever it takes to develop Adams Center Road?
Like I stated before, “Bad numbers in means bad numbers out!”
I hope the Democrats find a “warm body” to run against Nelson Peters. I will be voting for them and will encourage as many people as I can to vote for the “warm body!”
Jeff:
You are correct, I was wrong in the paragraph where I discussed the TIF capturing residential revenue. Of course they are using this supposed residential construction to justify many other things in the steady that are bogus; however, my comments concerning the TIF district capuytring residential proerpty are inaccurate and I corrected it today. Thanks!
Kevin Knuth:
Are you serious that “The Commissioners told the contractors to ASSUME that this would be the area where Fort Wayne, Allen County and New Haven would be pushing for all future economic development (meaning we would quit trying to develop out by the airport, out northwest, etc.)?”
Does this mean we are going to abandon downtown and Harrison Square immediately? Are we abandoning Southtown Mall? Are we going to put a building moratorium on NACS and SACS?
Mike Sylvester
Mike,
The part in parathesis I added- but the woman who presented SPECIFICALLY stated that her impression was that this was to be THE promoted area.
Clearly, this is not a good thing, and I doubt the city was aware of this.
The impact is that if ALL economic development efforts are pushed to this corridor, of course it will succeed. But since that is not the case, it brings more questions.
I left before the meeting was over, and though I do know that they consultants are going to ‘re-work’ their numbers to include Tax Abatements, I do not know if they are going to take into consideration that there are other Economic Development zones in Allen County.
I am somewhat paraphrasing, but that is pretty close.
John Kalb was there- John, am I fairly accurate?
Kevin - I guess so - when she was talking, it seemed that she was not real sure of what she was saying. Also, almost every question that Cal Miller asked, led to a whispered discussion among the three persons making the presentation before giving an answer. I got the impresession that they were thrown by the questioning format - almost like they had prepared for a “lecture” rather than a discussion. Watch it yourself and see. John B. Kalb
John & Kevin,
I watched the video last night and having in a past life present projects to management I have been blind sided. What happens is the people wanting you to do the report give you some bad information to develop your report on. Then you start to present it and find out management was not thinking along those lines…. You talk about wanting to smack someone up side the head!!!!
I would have seen the all the paperwork the County Highway Director had come up with all the savings the road would produce is gas savings, emissions and so forth. Then again maybe that is why they added so much residential area on the south end of the project. Of course not sure why those people would drive north on Maplecrest as their is little industrial employment in all of St. Joe Township.
HWI made a poor statement of improving safety for thier workers. The railroads where there before HIW was even located their. So us to spend millions of dollars to make the drive better is not the taxpayers deal.
I still can not believe that the County and the City going along with all industrial econ devel will be done in this area until it is 100% built out. What a joke.
The consult. could have forecast the normal build out of the industrial area is by using the industrial areas we already have available. Then again it would not provide the pipe dream numbers they need to say this project works.