Fort Wayne Community Trust Fund
A local newspaper (editor removed actual name) discussed the Community Trust Fund in the Sunday newspaper.
Per that article:
Tim Haffner, Fort Wayne corporate counsel, said the city’s lease with Indiana Michigan Power doesn’t expire until March 2010, and the city will continue to receive monthly payments until that time. City Controller Pat Roller, however, was unsure whether the payments would extend beyond next September.
When pressed for an explanation last week, city officials were unable to answer how the discrepancy was discovered or why the lease lasts until 2010.
This “Community Trust Fund” is a large asset that the City of Fort Wayne has access to and the City of Fort Wayne cannot tell us:
- Exactly when the lease payments end.
- Why it ends in 2010 rather then 2009 as they had previously told us
- Or even how the City finally figured out that the date they have been using is off by six months.
Brilliant!
I have heard a lot of people state that they want to see the Community Trust Fund used to build something “significant.”
I 100% disagree. This money should be used for one purpose and one purpose only; to pay down existing debt. I would also consider paying for unfunded liabilties the City is obligated to pay.
Mike Sylvester
Prices Going Up At The Harrison
As discussed previously, Barry Real Estate has decided to knock one floor off their condos and lower the number of units from 61 to 26. In doing so they are eliminating all the smaller one bedroom units and making the condos larger (and more expensive). From What’s Going Down(town):
Irwin explains the change as being a reaction to interested buyers who have repeatedly provided feedback that the units and balconies are too small and that the per square foot cost of the units is too high.
The new plan is expected to include less than half the previous amount of units because of a significant desire for larger units.
The units would range from about 1280 to 1750 square feet and would include larger balconies and lower per square foot prices, with prices for unfurnished units ranging from $220k to $320k.
This is a disastrous idea. We need more people living downtown to make this a true catalyst project, not less. They should’ve lowered the prices and increased the number of condos. I just don’t see how they are going to recoup the type of investment they’ve promised to make with 26 condos. Does this mean they will look to lower their overall investment in the project?
We know they’ve already discussed scaling it backfrom $21 million to $14 million but I’m still not sure that’s enough. And will the retail rates have to come down if the number of tenants is cut in half?
We will see…
Support The Square
Chuck Surack, president of Sweetwater Sound, penned a letter-to-the editor last week supporting Parkview’s decision to buy the naming rights to the new downtown baseball stadium. In that letter he argues against some of the very criticisms that have been levied by commenters here at FWP. But I want to zero in on this comment:
Parkview CEO Mike Packnett is on record as saying, “Harrison Square clearly comes under the heading of a critical economic development project – for Fort Wayne, the region and for Parkview. Downtown Fort Wayne is at the heart of the economic well-being of the entire region.” I couldn’t agree more, and that’s why a vast majority of the business leaders in this community, including myself, have supported Harrison Square.
Really? What has Surack done? What have the vast majority done? I recall numerous bankers touting the importance but yet there’s no financing. Barry Real Estate hasn’t even been able to sell more than 10 lousy condos.
This “support” seems akin to plopping a Support the Troops magnetic yellow ribbon on your car, or in Surack’s case his helicopter. Maybe that’s how Barry Real Estate can get their financing; make a bunch of Support the Square memorabilia and sell it to the masses. Supporters can at least do that much right?
City’s 2009 Draft Budget Completely Unacceptable
The administration posted the proposed 2009 budget on their website today and after reviewing it I must say it is completely unacceptable. The budget calls for a mild 0.09% increase in expenses but that doesn’t tell the whole story (remember the budget was flat from 2007 to 2008).
The problem is that starting next year, due to HEA1001, the city will collect $2.1 million less than originally anticipated. And in 2010 the full effect of HEA1001 kicks in and the city will collect $9.5 million less than expected. What this budget does is kick the can down the road and forces a major showdown in 2010. The mayor knows this as his own previous comments confirm what needs to happen:
Mayor Tom Henry on Thursday wrote off increasing local income taxes as a way to help balance the city’s budget, at least for 2008.
Henry told the Northeast Area Partnership, which consists of different neighborhood associations, that he would not ask the City Council to raise the local income taxes this year. Instead, he said the city must find a way to trim $5.8 million from next year’s budget. — A local paper, May 9, 2008
So what happened? Where’s the $5.8 million cut? Where’s any cut? The state legislature phased HEA1001 in for a reason and this budget does not take advantage of that “grace period”. It is fiscally irresponsible to ignore the 2010 challenges and pass this budget without significant changes. We must prepare for next year’s shortfall now.
Let me take a stab at what’s going on here. From day 1 Mayor Henry has tried to fight the effects of HEA1001 by suggesting tax increases instead of spending cuts. If the current budget passes I don’t think there’s any doubt that come next year we will face significant cuts in services. At that time the mayor will push heavily for an increase in the income tax - an idea he floated earlier this year.
What we must do now is cut the budget by 1-2% in order to prepare for 2010. I would suggest that, on average, every department funded by property taxes cut their budget by 1% - that would cut $2.5 Million from the proposed budget. By my calculation, if each department that currently has an increased budget for 2009 were to reduce their budget until it’s flat with the 2008 values. that would save us $1.6 Million of the suggested $2.5 Million.
I think we all understand that cutting the budget is difficult. But if they can’t cut the budget by 1% or 2% this year then how in the world are they going to cut it by 7-9% next year? They won’t of course - they will simply raise taxes. Everyone needs to understand what’s going on here - don’t be duped…
Is Police Co-Location Worth $10 Million?
From WANE:
“It seemed like perfect timing: the lease on the FWPD’s building will be up in a year and the sheriff’s department’s been looking for a new home for quite a while.
But in the end, it all came down to money.
County and city leaders met Tuesday afternoon to discuss the cost of putting both departments into one building. It would run more than $20 million and officials say they’re $10 million short.
Both sides say they’re disappointed, but feel they’ve made the right decision for taxpayers.”
[...]
“County Councilman Nelson Peters says, “I think that it’s important to keep in mind those people that we represent - the taxpayers - who would effectively have to pick up that bill and ask the question as to whether a $10 million pricetag at this point is worth having city and county police in one building.”"
What say you, Fort Wayne Politics readers?
Would it be beneficial to the long-term health of Fort Wayne and Allen County to scrounge up $10 million in order to have both police departments located together at the City-County Building?
Should our elected representatives find a way to make it work or should they let each party go their own separate ways?
More on Mark Souder
He has a radio interview on WOWO that you really should listen to. I am not sure how long WOWO will keep the link up for, so I suggest you listen to it soon.
Some highlights (My comments are in bold):
Mark Souder did not think the bailout vote would be brought to the floor unless they had enough votes to pass it. Either he was wrong or people changed their votes.
Mark Souder said there was “minimal risk and taxpayers may come out ahead.” This is laughable at best.
Mark Souder said that “most people believe assets are 95 cents on the dollars. Warren Buffet is buying at 60 cents on the dollar. I would like to meet some of these people that believe that the risky and bad mortgages the bailout would direct the Treasury Department to buy are worth 95 cents on the dollar. Mark Souder is the first person I have heard say that. Please realize that some of these baskets of bad mortgages have greater then 50% of the homes in foreclosure already. There is no way that all of these mortgage assets are worth 95 cents on the dollar. There is also no way that the average value of these bad assets are worth 95 cents on the dollar either. If they were worth 95 cents on the dollar the banks would not be in the situation they are in.
Mark then went on to say that he supports the bailout because he wants a “Recession not a Depression.”
Later in the radio interview Mark Souder clarified that his figures (60 cents and 95 cents described above) were based on a local banker who in turn made them up since no one really knows what these assets are worth. I doubt that any local banker could possibly believe that a portfolio consisting of sub prime or alt-A loans that was written in 2005 or 2006 and had 50% or more of the houses in foreclosure could possibly be worth 95 cents on the dollar. I would believe that a banker MIGHT beleive that SOME of the baskets of bad loans are worth 95 cents on the dollar. If he does believe that the bad mortgages and loans that the banks want to get rid of are worth 95 cents on the dollar; I hope my money is not deposited in that bank!
I do not think Mark Souder is a fiscal conservative. I do not think he believes in smaller Government. I do not think he understands the value of sub-prime and alt-A loans that are bundled together.
Mike Sylvester
Harper Tops First FWP Poll - Mayor Henry’s Approval Up Next
Our first poll asked which member of city council readers found the most impressive thus far. The results were interesting:
| Harper | 25% |
| Brown | 20% |
| Goldner | 17% |
| Didier | 14% |
| Pape | 11% |
| Smith | 7% |
| Shoaff | 3% |
| Hines | 3% |
| Bender | 1% |
I think we’ll continue doing polls and see how it works out. Please take 2 seconds to answer our latest polling question regarding mayor Tom Henry’s job approval…
CFAB Grant Applications Due Sept 30
If you’re interested in obtaining a grant from the Cable Fund Advisory Board then be sure to submit your application by the end of the month. Grants are awarded to non-profit organizations that produce programming for the local public access television channels. Typically these grants have been used to buy equipment and software but the grant criteria is detailed on the application.
The grant submissions will be discussed at the next CFAB meeting on Thursday October 16 @ 5:30pm in the Omni Room on the 2nd floor of the City-County building.
Drop me an e-mail if you have questions…
Mark Souder takes the “big government” stance AGAIN
You should read today’s piece in the News Sentinel written by Bob Caylor. It discusses the views of all three candidates for Indiana’s 3rd Congressional District on the current bailout being considered by Congress.
On this blog several commenters have taken exception to the fact that I am voting for Libertarian William Larsen rather then “big Government” Republican Mark Souder this fall.
This article shows just one more reason why I cannot vote for Mark Souder for Congress.
I have posted a lot about the Socialist bailout of Wall Street on this blog and everyone reading this blog knows that I oppose it and why I oppose it.
Per the piece Libertarian Larsen opposes the bailout package.
Per the piece Democrat Montagano says “he would not support such a bailout unless benefits for more individuals are added.”
Per the piece Republican Mark Souder says “some type of bailout is necessary…”
Further he says that after consultations with experts from Bank of America and JP Morgan Chase that “Federal support is needed unless you want to lose every bank in your district.”
What a complete load of BS.
Mark Souder should go and consult with local banks in his district rather then large banks located in New York who are poised to gain the most from this bailout. Mark Souder should call some local financial planners, CPA’s, bankers, etc. I talked to two other CPA’s today and three certified financial planners today. All six of us oppose the bailout in Washington DC. We all live in Mark Souders District and we are all small business owners in Mark Souder’s Congressional District.
Rather then talk to us he chooses to talk to Bank of America and JP Morgan.
I will be voting for Libertarian Larsen for Congress.
This piece shows yet another reason why.
Mark Souder is a “big government” Republican that has no grasp of economics.
Mike Sylvester
The Fort Wayne Economic House Of Cards
The global financial markets’ “house of cards” has come crashing down because they were greedy, operated without regulation, had opaque financial statements and didn’t make sound financial judgments. What we have being played out on the national scale could very well show up here in Fort Wayne in the near future.
Let’s step back and take a look at some of the decisions that have been made by our city leaders over the past few years and see if they sound like they are based on sound financial footing.
- Harrison Square - The condos are woefully behind schedule and the city has already said they will have to use 60% of the Jefferson Pointe TIF revenue instead of the 50% they promised. But that’s not the major problem as I see it. The hotel is the deal breaker here - HS would not exist without this hotel. As of today, we have heard nothing about the hotel but the financial projections that were used to sell the project were not realistic.
- Public Safety Academy - This was supposed to be run by a private foundation and become self-sufficient. Now the foundation has essentially disbanded and the previous chairman has suggested that Mayor Henry’s cronyism is to blame for the current situation. Currently the academy is floundering and is no where near living up to the promises that were made.
- Renaissance Pointe - This was the gentrification project that was supposed to help revitalize Southeast Fort Wayne. The project was as ill-conceived as any I’ve ever seen. Putting in $150k homes that are surrounded by $30k homes doesn’t make sense. In fact, local government had to step in because potential buyers couldn’t get loans for the properties because the appraisals were too low. Now that the real estate market has tanked the project is even worse condition than it was before. This project is a continuation of the failed mortgage policies we’re seeing on the national level - an expansion of home ownership, consequences be damned.
- Maplecrest Extension - On the outskirts of town we are going to build a few bridges and magically businesses will flock to the area helping the project pay for itself. This argument is so ridiculous I’m not going to bother arguing against it. At one point (months ago) I had a discussion with commissioner Nelson Peters regarding the project and the current economic doldrums we were experiencing (and still are). In a statement that caught me by surprise he said “well thankfully most economists think we’re through the worst of it”. I was shocked because I hadn’t heard any economist actually say that.
The common thread behind all these projects is the idea of public-private partnerships. That’s a fancy way of saying government-subsidized. And I don’t want to get bogged down in minor subsidies like $100k for street improvements or painting buildings. No, these projects all have massive subsidies behind them. Why is this level of subsidy necessary? Because the projects simply won’t work otherwise. That, in and of itself, should be a red flag to everyone.
These projects are being subsidized because they are too risky for private enterprise. The problem for Fort Wayne is that the federal government won’t come bail us out if these projects begin to fail. Local taxpayers will foot the bill if that begins to happen. We must stop these kind of projects immediately as we are already over-extended as is. Soon the Jefferson Pointe TIF slush fund will be completely used up and we’ll have no where to go but into the taxpayers’ pockets (i.e. Kitty Hawk).
Let’s get our government back into the business of government and stop playing developer. Government can lower taxes or abate development in the areas that need it the most but they shouldn’t become “partners”. In fact the partnership description is really a misnomer as we’ll be left holding the bag if things go south.
Right now local government’s economic deck of cards is teetering on the brink of collapse and if that happens we’re all going to be paying for it…
