Monthly Archives: July 2009

Caterpillar, Museum Block

Museum still $5 million short

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You may recall that the sales tax increase for the proposed Peoria Riverfront Museum only closed the public funding goal, and that the museum group was still $11 million short on the private funding side. Whenever they were asked about this at town hall meetings before the vote, the answer was always that the CEO Roundtable had committed to raising $8 million of the remaining money from private sources, and that the museum group is “confident” that they can raise the remaining $3 million not covered by that.

The vote took place in early April. It’s now late July, and the Journal Star reports today, “Officials are trying to bridge a $5 million gap in public and private dollars still needed.” So it sounds like the CEO Roundtable has been unsuccessful in raising their promised $8 million (shocker!), leaving not a $3 million gap, but a whopping $5 million gap. Huh. Who’d have thought that a group so unsuccessful in raising private funds for this thing over the past ten years would have so much trouble closing an $11 million gap now?

In other news, Caterpillar, the company that lost $112 million the first quarter of 2009 and has been laying off lots of its workers, donated $100,000 to the “Friends of Build the Block” campaign, according to campaign finance reports. That $100,000 went toward marketing materials that proclaimed, “Over a 25-month construction period beginning in late 2009, The Block project will employ 250 to 300 local workers per month and contribute $1.8 million in monthly labor payroll to our area’s economy.”

Only it won’t actually do that. Almost immediately after the referendum passed, Caterpillar announced that it wouldn’t be building anything this year because of the economic downturn. And they haven’t given a date when they will start building it, either. Presumably, it will be after the economy recovers. So much for our “home-grown economic stimulus package.”

But the good news is that Peoria will still get the higher taxes it wanted. Those are still scheduled to begin in January, whether anything gets built or not. Probably the museum group won’t wait for that final $5 million to be raised before they start building. They’ll just start building anyway, and then when they start running short of money toward the end of the project, they’ll have another capital campaign, or another referendum, or some other gimmick to pry more money out of taxpayers’ pockets. By then it will be “too big to fail,” you know.

Peoria Public Schools

D150 Analysis and Recommendation regarding Woodruff

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I don’t have the graphs and figures referred to in this document, but I do have the main text. This is the document that was given to the District 150 school board to support the administration’s recommendation to convert Woodruff High School to a grade school:

Narrative Summary on
High School Repurposing Analysis

Staff of PSA-Dewberry were asked to do an analysis of the feasibility of repurposing either the Woodruff High School or Peoria High School facilities as B-8 Community Learning Centers. That analysis involved the Educational Consultant for the B-8 new schools (Best Practices Inc.) and is summarized in this narrative. This summary also includes district-provided data and analyses of financial considerations and attendance boundaries.

This narrative summarizes the presentation by Ken Hinton, Superintendent, and Paul Kouri, Architect, PSA-Dewberry, to the board on July 20, 2009.

Status of the district.

Financial Considerations
The school district is currently facing financial challenges which necessitate reconsideration of the use of high school facilities. Improvement of the district’s financial condition is the primary reason for making changes. This also provides an opportunity to improve the educational services to all students. A reduction in the number of schools will result in savings in the number of staff needed to operate the school (administrative, custodial, teaching and support staff). An analysis by district staff shows that closing a high school saves money by reducing the district payroll by approximately 45 total staff members.

Another financial consideration is the use of Public Building Commission funds as a source for building construction and updating school facilities. There is a time limit on the utilization of Public Building Commission funding; construction must be substantially completed by June 30, 2011.

Educational Benefits
There are additional educational benefits in consolidating the district’s four high schools into three. Reduction in the number of high schools will reduce duplication of staff and enable a more focused and effective use of staff. Reducing the number of high schools will increase enrollment in courses with less demand. This will enable these courses to continue to be offered and will keep all high schools comprehensive. With a wider array of courses offered, the high schools are more likely to retain and attract students and families to the district.

Current Status of the District
Figure A shows the current status of the district and locations of the school facilities.

Previous Decisions
There are a number of previous decisions which provide guidelines for repurposing a high school. These include the following decisions made by the school board.

  1. To close one high school
  2. To close primary schools Kingman and Irving
  3. To build new schools following the B-8 or K-8 model.
  4. To utilize the remaining funds from the PBC for the Math, Science and Technology Academy, Career Vocational Center and a non-traditional school.

The requirements for the Peoria Public Schools B-8 Community Learning Centers (CLC) were developed through a community charette process in 2006 and accepted by the board in 2007. The approved CLC program includes access to and utilization of outdoor areas and green space, a village concept to encourage continuity and professional learning community development, space for project work and in-depth 21st century learning, space for extended day and week programs for students with community involvement, space for community use for adult education, neighborhood and community organizations, and child care support programming. In addition, the CLC design includes zoning of the building to enable community use during non-school times.

Decisions to be Made

The next decision which needs to be made is which high school can be repurposed most effectively. To assist in making that decision a financial analysis was done by district staff to see if there would be a financial advantage in repurposing one high school over the other. A utilization analysis was also completed to see which building could be used most effectively to meet the educational vision of the B-8 schools. The location of students in Kingman and Irving attendance area were also analyzed.

Financial Analysis Results

Financial scenarios were developed and then analyzed. These are summarized in graph 1.

Scenario 1: Current Status with all four high schools open. What will happen financially if a high school is not closed?

Scenario 2: What will happen financially if Woodruff remains the High School and Peoria High is repurposed as B-8 Community Learning Center?

Scenario 3: What will happen financially if Peoria High remains the High School and Woodruff becomes the B-8 Community Learning Center?

The Graph shows a slight financial advantage to having Woodruff repurposed as a B-8 (Scenario 3). A busing analysis shows approximately $45,000 less in busing costs if Woodruff is repurposed. However most of the $45,000 is reimbursed with a final impact on the budget of approximately $10,000.

Under the Woodruff B-8 Scenario, the busing analysis also showed that students attending from the Irving and Kingman attendance areas will spend less time riding buses.

Educational Analysis as a High School.

Both facilities are currently functioning well as high schools.

Utilization Analysis

The following questions were used to guide the process of analyzing how best to use the repurposed high school.

Question 1: Could the Kingman and Irving primary students all be placed together in one of the high school facilities (either Woodruff or Peoria High)?

The answer to this question is No. Research supports the district’s movement to a K-8 or B-8 model instead of separate primary and middle schools. Keeping Lincoln as a separate middle school would continue the separation of the primary and middle school. This is an opportunity to continue the positive B-8 initiative in the district.

Question 2: If we combined Lincoln middle school students with Kingman and Irving students, could this new B-8 school be placed in one high school?

The answer to this question is No. Two “schools” would be required to accommodate the approximately 1000 student population which would result from combining the two primary schools with the reconfigured Lincoln middle school. One thousand children in one elementary school program is not recommended.

Question 3: Could a closed high school and Lincoln school be combined to create the complete B-8 model?

Yes. The analysis of the spaces available in the two high school buildings revealed that either high school facility could be repurposed to create one B-8 Community Learning Center. Additional space will be required for either high school facility to meet the guidelines of the Community Learning Center previously accepted by the school board. Two B-8 schools would be required to provide the approved CLC program. The addition of Lincoln school is required to have adequate, efficient and effective space for the two new schools.

PSA then analyzed the differences between these two options: Peoria High plus Lincoln repurposed; and Woodruff plus Lincoln repurposed. (see figures b-l)

The primary differences in these two alternatives are as follows:

  • Location of student population from the school
  • Length of time students are riding on the bus
  • Accessibility of shared community resources to both B-8 Centers
  • Access to outdoors and green space

III. Recommendation

After reviewing the previous decisions and the analyses of student distribution, financial scenarios and facility utilization, the recommendation is to repurpose Lincoln and Woodruff schools as two new B-8. (See figure M.) Lincoln School would house all components of the B-8 model except for early childhood and the community components. The early childhood and community components at the Woodruff facility will be available for use by the Lincoln Community Learning Center children and families. Air conditioning already in the Lincoln facility will enable this B-8 CLC to be a year-round school.

The second B-8 CLC will be located in the Woodruff facility. Additional upper floor spaces not fully utilized by the B-8 components will enable this CLC to serve as a special focus school with the focus yet to be determined.

The last recommendation is to develop a task force to review the vision of high school education in the district and determine how to best meet needs of all students.

City of Peoria

Debt service: $18,738,827

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I went to a recent budget open house for the City of Peoria, and this graph caught my attention:

2009-Total-City-Budget

Our budget deficit is approximately $10 million. Our debt service (the amount we pay on principal and interest per year) is nearly $19 million. That debt service includes money borrowed for the recent Civic Center expansion, the Peoria Public Library renovation/expansion, acquisition/infrastructure work done in TIF districts, and some other infrastructure projects.

The money to pay for this debt comes from various sources. The Hotel, Restaurant, and Amusement (HRA) tax pays for the Civic Center expansion. A portion of our property taxes is specifically designated for the library’s recent capital projects. And debt incurred in TIF districts is covered by the new taxes produced by the TIF (the “tax increment”) — with one notable exception: MidTown Plaza.

MidTown, home of the now-shuttered Cub Foods, has never paid for itself. While there has been some incremental increase, it’s not enough to cover its own debt service. Money from the general fund makes up the difference. Staff is quick to point out that they recommended against that TIF, but the council voted for it anyway.

As if that weren’t enough, the council has committed to taking on more debt: $39.5 million for a Marriott Hotel to be built across the street from the Civic Center, to be paid for with the tax increment within the newly-created Hospitality Improvement Zone (HIZ) TIF plus a 1% sales tax increase within the TIF. The city hasn’t had to sell the bonds yet because the hotel developer has been unable to get supplemental financing through bank loans.

Think about this debt and the taxes that pay for it when the council is haggling over closing its structural budget deficit. They have no problem raising or maintaining taxes for non-necessities and developer welfare — even in the leanest of times, as the hotel deal shows — but feign frugality when it comes to paying for basic city services. They cut police and code enforcement personnel, reduce road maintenance, and institute other cost-saving measures ostensibly to keep taxes “low.” In reality, the city is acting no differently than a person who balances his household budget by cutting his grocery purchases while maintaining (or even increasing) his cigarette consumption.

City Council, City of Peoria

Council brainstorms money-saving ideas

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The August 11 Peoria City Council meeting promises to be a long, long meeting. The council spent an hour and a half Tuesday night brainstorming ideas for plugging the projected $10 million budget deficit. City staff will take those ideas and run the numbers on them (and in some cases, check the legality of them), then bring them back on August 11 for a policy session where council members will discuss them in detail.

Here is the list of ideas as compiled by the Journal Star:

New tax and fee ideas

  • 2 percent tax on package liquor
  • “Carry out” tax on restaurants, retail establishments, distributors or other businesses that generate wrappers, bottles and other products that turn into litter
  • “Bed tax” on not-for-profit entities such as Bradley University and local hospitals
  • Business license fee
  • Additional tax to use city parking decks
  • Arrest fee
  • Fire service protection districts
  • 5 percent water utility tax
  • Storm water utility tax
  • Fee assessed on pet owners
  • 2 cent per gallon motor fuel tax
  • Eliminating $6 a month garbage tax and rolling it into the property tax

These were in addition to the suggestions made by staff in this report, which includes wage freezes, voluntary separation, revenue adjustments (cutting funding to ArtsPartners, the public library, and other organizations), and revenue increases (e.g., eliminating free land waste pickup).

Councilman Gary Sandberg also suggested that, if the council is going to consider cutting funding to the library, they should also consider cutting funding to the Peoria Civic Center by the same percentage. He also asked staff to bring back a report on how much downtown parking decks would need to charge to break even (i.e., eliminate parking subsidies).

He also hinted at a more radical suggestion: eliminate the city’s police department and turn that function over to the Peoria County Sheriff’s Office. Sandberg points out that county law enforcement officers’ salaries are one-third less than Peoria police officers’. After the meeting, he added that we could put half the savings in salaries toward plugging the budget deficit, and use the other half of the savings to hire more police officers. In effect, we could help plug the deficit and increase police protection at the same time.

I asked Police Chief Steve Settingsgaard what he thought about Sandberg’s proposal. He said that it wasn’t an apples-to-apples comparison to compare city officers to county officers. Instead, when comparing salaries, the council should compare city officers in Peoria to city officers in other similar-sized cities. He said that there are differences between city and county law enforcement, but didn’t elaborate on what those differences are.

City of Peoria

More public budget meetings this week

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There are a couple more opportunities to talk to city officials about your take on the budget deficit. Your voice can be heard at these upcoming meetings:

  • July 15, 2009
    4:00 – 6:00 p.m.
    Pleasant Valley Middle School
    3314 W. Richwoods Boulevard
    Bill Spears (Fourth District) and Gary Sandberg (At-Large)
  • July 16, 2009
    4:00 – 6:00 p.m.
    Peoria Central High School
    1615 N. North Street
    Barbara Van Auken (Second District) and Ryan Spain (At-Large)
City of Peoria, Peoria County

City and County have golden opportunity to save $80 million+

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Both the city and county of Peoria are facing hard times. They’re in a budget shortfall and are looking at increasing revenue and cutting costs (which means services will be cut in some way). Each entity has unwisely committed themselves to large, approximately $40 million capital outlays for non-essential projects: the city for a private Marriott hotel downtown, and the county for a private museum that has received tepid support for multiple years.

Here’s the good news: Both of these projects have missed their contractual deadlines, meaning that the municipalities could easily cancel these agreements and save taxpayers a boatload of money, both in up-front capital costs and on-going operational expenses.

Here’s the bad news: They ain’t gonna do it. Despite a history of just these types of white elephants that have contributed to the current budget mess, you can bet your heavily-taxed bottom dollar that they’re still going to go through with them, even as they cry poverty when it comes to essential city services such as police protection and road maintenance.

It seems no one in the city is able to make the connection between large, non-essential projects, and high taxes. They all hate high taxes, and they all hate service cuts, yet they continue to support large, money-losing, unnecessary projects that swallow their tax money and give them little to nothing in return.

Residents are content to believe the tortured logic of their local politicians. Here are a few of my favorites:

  • “Canceling this capital project won’t do any good because the money to pay the debt can’t be reallocated to operational expenses; it can only be spent on this project.” — That’s true, but irrelevant. From the taxpayer’s perspective, canceling the project will save us money because we won’t have to support it with our tax money. It doesn’t matter that it can’t be reallocated; the municipalities are still going to have to plug their budgets with increased revenue from either taxes or fees. By canceling the agreements, that saves us from an even higher tax increase.
  • “This project will pay for itself.” — Let’s look at the hotel project. The developer can’t find financing for the rest of the project (apparently banks are a little more cautious with their money than the City of Peoria — which is saying something), and the Embassy Suites expansion in East Peoria was recently scrapped because, “The hospitality business as a whole in the country is experiencing extremely hard times.” Yeah, sounds like that will pay for itself, doesn’t it? Obviously the museum will never pay for itself; even ardent supporters don’t claim that.
  • “But the people voted for it.” This applies only to the museum, since the public didn’t know anything about the hotel until two days before the council voted on it, and basically had no voice in the matter. It’s not as if there isn’t precedent for the city council to ignore a vote by the people. They cut funding to the library expansion even after it was approved by a large majority of voters. This project was only narrowly approved, and mostly on the backs of Dunlap and North Peoria voters. It lost handily outside the city. I’ll bet if we had an referendum on increasing garbage fees, that would lose. Should the municipalities thus take that off the table? The fact is that any cuts in service or increases in revenue are going to be unpopular. Leadership requires that unpopular, but fiscally-responsible decisions be made in tough times.

The city and county need to cut the fat. They’re in debt. They can’t afford to provide basic services to their residents. If these developments are really the sure-fire money-makers they claim to be, let private interests finance them, not the taxpayers who are stretched already in this poor economy. Show some leadership.

Kellar Branch

Kellar Branch will likely be abandoned after all

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Kellar Branch RailroadOn the City Council agenda this week is an agreement — one of a “series of agreements” — that will pave the way (get it?) for a portion of the Kellar Branch to be abandoned so it can be converted to a recreational trail.

This agreement is pretty mundane. It just sets out how Central Illinois Railroad (CIRY) and Pioneer Industrial Railway (PIRY) will share trackage rights on the portion of the branch that remains, as well as the western connection to the Union Pacific line.

However, there is a mysterious, new entity that has popped up in the agreement: something called the “Kellar Branch Corridor Corporation.” According to the Secretary of State, it’s a not-for-profit organization incorporated in October 2008 by Thomas Leiter. You know Tom Leiter — that’s Alexis Khazzam’s father-in-law. Khazzam is a big recreational trail supporter. It seems this corporation has signed some sort of “Leasehold Purchase Agreement” with both CIRY and PIRY in October and November of last year.

Basically what this means is that Tom Leiter has somehow bought out CIRY and PIRY’s interest in all or part of the line. I can only presume he’s done the same with Carver Lumber, although it’s not explicitly stated in this, the first in a “series of agreements.” I wrote to city attorney Randy Ray asking for more details, but all he would say is:

I will try to get answers to all of [your questions]. For now, I will answer that the plan is to build a trail between Candletree and Park, with Carver being served from the West. This result is contingent on other things happening and is not assured by the Agreement on the agenda.

Well, we know that it’s more expensive to get rail service from the west. If that were feasible, the Kellar Branch would have been abandoned years ago. So, what’s changed? Only the creation of the mysterious “Kellar Branch Corridor Corporation” and its “Leasehold Purchase Agreements.” Sounds to me like some money has changed hands, and everyone’s willing to let the Kellar Branch be abandoned now. What they couldn’t do through lawsuits and regulators, they appear to have succeeded in doing with a little filthy lucre.

So money talks. What’s new? Well, here’s what we need to keep an eye on: who’s money? If it’s Tom Leiter’s, well, that’s his affair. But if one of these future agreements involves the Peoria Park District or the City of Peoria giving a large chunk of taxpayer money to Tom Leiter in return, that’s a different story. Somehow I just have a feeling that the taxpayers are the ones who are going to end up financing this scheme.

Ya gotta love the secrecy of Peoria politics. This has clearly been going on for more than nine months, yet this is the first time we’re hearing about it (publicly, anyway), and only because it has to be approved at an open meeting. Even then, they’re going to trickle out the agreements over time, so we can only see the full picture after it’s too late for the public to make any objections. A brilliant, albeit underhanded, plan.

Congratulations to the trail enthusiasts. It seems likely they will finally get what they’ve coveted for so long. Between this and the pending museum, Utopia is clearly just around the corner.

City Council, City of Peoria, Illinois American Water

Water rates could skyrocket

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Future water bills will be significantly higher if Illinois American Water Company and the City of Peoria get their way.

Illinois American Water Company (IAWC) wants to raise rates about 5% for infrastructure improvement, plus another 30.18% for a general revenue increase to cover higher operating expenses. The City, also in need of more revenue, is considering the possibility of imposing a 5% water utility tax to take effect next spring.

Let’s see, 5 plus 30.18 plus another 5 . . . that’s a 40.18% increase! That means a family that currently pays $30 a month for their water bill will be paying $42.05 (and this doesn’t include the $6 “garbage fee” that will remain on the water bill as well). That’s an increase of $144.60 per year. Wow!

Speaking of the garbage fee, they’re simultaneously looking at cutting the very services that fee supports. They’re suggesting the elimination of free landscape waste pickup — transferring the cost of that service to the users.

Meanwhile, downtown parking will continue to be subsidized. Priorities, you know….

Look for the exodus from Peoria to continue.