Council greed risks Tulsa prosperity

Editorial Analysis

The City of Tulsa is risking local prosperity in a misguided compulsion by at least one City Councilor to annex Expo Square and raise taxes for all Tulsans.  According to documentation provided by the City of Tulsa Finance Department and the Tulsa County Public Facilities Authority, annexation is not a good plan for anyone.  The only way the city could profit requires what legal experts say is unconstitutional abuse, and annexation is most likely going to reduce city tax revenue.

The city routinely provides police presence at special events without charge for many institutions, including local college sporting events.  They do not normally charge unless a street is closed.  For many years, Expo Square, in the operation of the annual Tulsa State Fair, has received such assistance from the Tulsa Police Department (TPD), and the Tulsa County Sheriff has provided law enforcement inside the fairgrounds.  If the city annexes, the Sheriff will not continue – TPD will be responsible, as it is their duty to patrol within the incorporated geographical area.  To recover that additional operational cost, Councilor Roscoe Turner, a former city boiler inspector, has proposed assessing Expo Square a huge fee.

It is unconstitutional to annex property for the expressed purpose of increasing fees for services already provided to that same property.  According to several attorneys reviewing the situation at Tulsa Today’s request, that is as blatant a case of highway robbery as a government could attempt.  Expo officials have pledged to fight such a fee in court.  That fee set aside, the City of Tulsa by its own calculation, will lose $111,000 per year – roughly the equivalent of one trained, equipped police officer – each and every year for perpetuity. 

On Sunday, March 11, Tulsa World Editorial Editor Ken Neal wrote that “If the city annexes, it will be difficult to determine how much revenue is coming from the fairgrounds.  The city will be guessing at how much the added fairgrounds tax brings in.  It might not be able to determine if the income covers the costs of police protection and other city functions.”  Neal is being kind – something he is not known for, as Tulsa Today is not known for agreeing with him.

In its conclusion, the City Finance Department analysis admits their revenue projections are pure speculation.  The report states, “On the revenue side, given the limitations of the available data, it is impossible to determine additional revenue the City would collect if the Fairgrounds is annexed.” 

Tulsa County, through the Tulsa County Public Facilities Authority operates Expo Square, hoping to draw dollars to Tulsa that would otherwise never arrive at local restaurants, hotels, and shopping outlets.  Expo Square – arguably the best event venue of its kind in the nation – profits all Tulsans.

But Expo Square does not make money every year – and if you figure the county’s funding of the Sheriff’s office, which is a general government expense, Tulsa County actually subsidizes Expo Square!  It’s not Expo Square’s mission to make money, but to draw more people through the turnstiles – the more people who come to events in Tulsa, the more Tulsa and the surrounding area profits.

Tourists are great.  They bring their dollars, demanding nothing more than common hospitality, popular events and modern facilities – and when they leave, their money can be used locally to fund street repair, schools and infrastructure.  Drawing visitors to Tulsa is the key, and in Expo Square, Tulsans have a remarkable, world-class facility which in 2008 will host one of the best horse shows in the nation – if the City Council doesn’t screw it up. 

The U.S. National Arabian and Half-Arabian Championship Horse Show, one of the largest and most prestigious national horse shows in the world, has signed a five-year contract to utilize Expo Square, beginning in 2008.  The event is projected to return dividends to the entire community to the tune of about $28 million annually. 

Tim Moerbe, Director of National Events for the Arabian Horse Association, said, “There are only about five or six facilities in the United States that can handle a show our size and until the recent improvements, Expo Square in Tulsa was not one of them.  Now, with the additional facilities [made possible by voter approval of 4-to-Fix One and Two plus Vision 2025], Tulsa has the perfect combination of facility and location for us.  These are some of the best facilities in the country.”

This is not your granddad’s old-hag horse show; some of these animals will arrive by airplane and are worth millions.  Do you honestly think their owners will only eat corndogs and not spend money around town? 

Brett Sundstrom, General Manager of the Doubletree Hotel at Warren Place, said the Arabian Horse Association has already blocked over 6,500 rooms.  “All full-service hotels in Tulsa will fill,” he predicted.  “This show will have a tremendously positive impact on hotels and restaurants in Tulsa.”

The Arabian show will require 3,500 horse stalls at Expo Square.  Of those, 500 to 700 will be converted to VIP suites to entertain clients of the owners.  Each suite will be built out with living room comforts – big screen TVs, kitchens, desks, seating areas, etc.  For example, in Louisville, one such owner spent $7,000 – a figure which he asserts is “average.”  Owners do not haul those furnishings into town but will purchase them in Tulsa – a $3.5 million to $4.9 million blessing to local retailers, and the local contractors who will be swinging the hammers.

Sadly, the chairman of the U.S. National Show Commission for the Arabian Horse Association more recently provided notice that the proposed annexation and accompanying sales tax increase would have an impact on its long-term contract with Expo Square.  Tulsa could lose the show.  That’s at least $28 million times five years, equaling a $140 million loss if just one of Expo Square’s clients pulls out.  What in the world is Councilor Turner thinking?

The City of Tulsa is running an annual budget of around $550 million.  The estimated and unsubstantiated gain from annexation – at best and utilizing the disputed fee – is $1.1 million.   That’s just a drop in the budget bucket – and about what the City Council has proposed as their salary increase.  It makes no dollars or sense.

It is possible that Councilor Turner, Democrat District 3, doesn’t understand the numbers.  He does understand that this is a tax increase for all Tulsans – he is proud to raise taxes – and he has often preached that county government should be restricted so the City of Tulsa can have more money. 

In contrast, Tulsa County at Expo Square upsized its stormwater management system by $500,000 above and beyond what was required, just to help reduce the strain on the city system in the immediate area – to be a good neighbor.

In considering systems management, the City Finance Department did not address the difference in the cost of waste management.  Costs are higher in the city, and currently Tulsa County sends a refuse truck specifically into Expo Square – another cost absorbed by the general operating budget of Tulsa County.

All operations and interactions between governments or any other change that could possibly risk this important public facility and Tulsa’s general prosperity should be studied in extensive detail before any change is made.  No such detailed examination of authority, management, or operations has been conducted by the city, and without such examination, any projections are, at best, just guesses in the dark. 

Contrary to politics – where any incompetent may get elected or bureaucracy where few get fired for incompetence – event and facility management is a complicated business.  In that regard, Expo Square has experts with high levels of experience in multiple disciplines, and their personal dedication to the facility goes beyond what anyone could find anywhere else.  Expo Square staff are the best at what they do.

Tulsa County, which operates on a $60 million budget compared to the city’s $550 million, delivers more value per tax dollar to area citizens.  When faced with a budget crisis, they cut back on non-essential services.  When Tulsa County recently faced a $5 million deficit, it opted to reduce spending rather than increase taxes – something our city government should note.

If anything, Tulsa should merge city government into county government, which has been highly successful in other parts of the country.  If that was done with the same level of investigation, attention to detail, and high number of unknowns as the attempt by Councilor Turner to annex Expo Square, it could be done next week. 

Last Updated ( Wednesday, 04 April 2007 )