By David Arnett
Sunday, 12 August 2007
Potential by Aaron SvenbyThere are two parts of public policy – politics and implementation. The first focuses on sound bites and the second actually accomplish things. As Tulsa County residents consider Arkansas River restoration and development those who have specific expertise struggle to find voice amid the political panderers and nattering nabobs of negativity as Spiro Agnew so aptly called them.
One issue football currently in play is the disingenuous assertion that Vision 2025 holds surplus available for river development. This is a false assertion. While there is money included in the Tulsa County infrastructure programs Vision 2025 and 4-to-Fix for Arkansas River projects, there is no surplus beyond specific allocations according to John Piercy who is contracted with Tulsa County to manage the financial aspects of both programs.
Piercey is Senior Investment Banker with Capital West Securities and holds a Ph.D. in economics with more than 27 years of municipal finance experience.
In a July 26 press conference, Piercey said, “Facts are as follows: As of today all funds being received are being used to pay debt service for bonds issued to fund projects, being held for projects currently awaiting start of construction or being used to pay for projects currently under construction and not funded by bond proceeds. There is no current surplus.”
“When the voters of Tulsa County approved the Vision 2025 program, they authorized and charged, by a more than 60 % approval margin, the County Commissioners to collect a 6/10 percent sales tax for 13 years to build and/or fund approximately 32 county wide projects with cost estimates, in 2003 dollars, of $530 million. The key part of this was to build the 32 projects. In order to build the BOK arena and convention center remodel as promised the $530 million projects total was increased to $575 million. While money was allocated to river projects no one promised or expected that the amount allocated was sufficient without federal funding. Federal funds have not been funded or even authorized [as of this date], Piercy said.
“The Vision 2025 program is nearing the end of the fourth year of implementation. While all of the major projects are funded and underway, the smaller projects that are being funded out of cash flow will take probably until 2011 to be funded and finished. Some projects, such as the low water dams, are awaiting decisions as how they can be completed.
“The Board of County Commissioners has two obligations, the first is to build the projects and the second is to pay the debt created to fund a portion of the projects. The first part of that obligation will probably not be finished until 2011. The second part of that obligation, paying the debt off, will continue through the end of the tax, i.e. 2017,” Piercy continued.
“If the financial plan currently being implemented by the County works as planned there likely will be surplus funds as the program nears its end (2015 and beyond). Under current forecasts that surplus could be as high as $84 million. Of that amount, $39.4 million would not come until 2017,” he said.
Kirby H. Crowe, Managing Partner of PMg LLC the firm contracted to serve as Program Manager for Tulsa County in the implementation of Vision 2025 notes, “Vision 2025 was approved and is implemented as three individual propositions. Within those, the river projects are included in Proposition 4 – Community Enrichment, which in accordance with the ballot title is levied at 17.5% of 1% of the total program. With that, if the projected surplus does come to fruition only that same 17.5% could be made available to Proposition 4 projects.”
Piercy said, “Future sales tax growth is a function of many factors, the national economy, the local economy, and the expenditure patterns of local consumers, nine years are still uncollected and one can only hope that surpluses are in fact realized. Two things are certain – the (a) amount that actually occurs will be either more or less than current estimates and (b) it is way too early for people to start spending what one does not have.
“If the voters of Tulsa County want to wait until after 2015 to see if there are surplus funds or wait until federal funds come to do something on the River, that position can be voiced in an election. By waiting, however, they also forgo $110 million plus in private donations and the substantial development that will result from other public and private investments,” Piercy said.
“Dealing with sales tax funded projects are always complicated by launching programs using current dollar estimates and funding them using future dollar collections. Both debt financed and pay-as-go programs must always deal with the difficult task of matching future costs and future revenues. If the Vision 2025 program does, in fact, end with a surplus then the elected officials should be congratulated for a job well done.
“The Vision 2025 program as of July 1, 2007 has $410 million in debt outstanding. Sales taxes are monitored monthly and projects funding schedules are updated every six months. The sales tax collections received in the month of July were up by 0.88% compared to July, 2006,” Piercy concluded.
Crowe notes the current status of Arkansas River restoration and development projects within Vision 2025 and 4-to-Fix are as follows:
Arkansas River Dams: (Vision 2025) Allocation $5.6 million of which $275,000 has been expended on the Phase 3 environmental study in cooperation with the US Corps of Engineers. That study is approximately 60% complete and is required by the Federal government before any work can be done.
Zink Lake Shoreline Beautification: (Vision 2025) Allocation $1.8 million. No funds have been expended as this project determination is pending recommendations from the study.
Zink Lake Upstream Catch Basin and Silt Removal: (Vision 2025) Allocation $2.1 million of which no funds have been expended. This method of silt control is not the recommended method by the ongoing study. Subsequent to the ballot, the study recommends passing the silt downstream via additional gates in each dam.
Zink Lake Safety: (4-to-Fix) Allocation $650,000 of which no funds have been expended. This allocation is to modify the downstream face of the low water dams at the same time additional gates are installed to reduce drowning from “roller effect” of water over the current dam.
Crowe also notes that Federal matching funds were anticipated by the previous River Parks Director (who advocated inclusion of this project within Vision 2025 and estimated the level of funds necessary) at 2/3 Federal to 1/3 local for the dams and the Shoreline Beautification projects in the form of habitat restoration from the Corps. This appears to have been a very aggressive match percentage based upon what Oklahoma City received. In addition, the basis for the cost of the new dams that was used was low and does not appear to have been proofed.
About the Author:
David Arnett began his career in professional journalism in 1985 and has published Tulsa Today since 1996. After the Vision 2025 vote, he was hired as Public Information Manager by PMg (the day job) the private firm hired to implement the program as has been disclosed by this news service when he has later written on related subjects.
Last Updated ( Wednesday, 15 August 2007 )