January 13, 2017
KANSAS CITY, Missouri – The status of Kansas City, Missouri’s anticipated $800 million General Obligation bond issuance was thrown into doubt on Thursday, January 12, as competing ballot language was introduced just seven days before the deadline to submit language for the April 4, 2017 election ballot.
The KCMO City Council’s Transportation & Infrastructure and Finance & Governance joint committee once again convened on the morning of Jan. 12, in what was expected to be a key moment in the crafting of ballot language for the proposed $800 million G.O. Bond. With less than two weeks and only one full City Council session remaining until the January 24 deadline to submit ballot language, however, there remains no consensus on the best way to present the infrastructure package to Kansas City voters.
Instead of moving towards that consensus, Thursday’s joint committee meeting was highlighted by the introduction of 3rd District Councilman Quinton Lucas’s committee substitute to the G.O. Bond ordinance. The substitute maintains the $800 million total asking price for Kansas City infrastructure improvements, though it adjusts the dollar figures and project categories contained within each of the three separate questions expected to be placed on the ballot. Under Question 1 of the Lucas substitute, the city would issue $550 million in general obligation bonds for “construction and reconstruction of existing streets, bridges, and adjacent sidewalk repair and replacement in compliance with Americans with Disabilities Act standards.”
Question 2 in Lucas’s plan would include $25 million for the new 60,000 square-foot animal shelter (and accompanying improvements to animal control infrastructure) to be constructed on 10 acres of land at the intersection of Elmwood and Gregory. The new facility would replace the 44-year-old shelter located at 4400 Raytown Road where KC Pet Project currently operates its no-kill shelter. The third and final ballot question in Lucas’s committee substitute would include $225 million split between the city’s flood control needs and a Neighborhood Sidewalk Replacement Program.
The joint committee meeting came to an abrupt conclusion following a brief flurry of Council debate, as both Lucas and 5th District Councilman Lee Barnes Jr. had prior commitments to attend. Facing a deadline to make that obligation on time, Lucas moved that the Council committee hold the matter for a special committee meeting to be conducted in the first part of next week. The motion passed, and the meeting was over.
If the Council fails to come up with ballot language that a majority can support before the January 19 regular session, there will be no general obligation bond measure on the April 4, 2017 ballot. After the Jan. 12 meeting concluded, Lucas expressed confidence that a compromise can be reached, though the 3rd District Councilman at least entertained the notion that the deadline could pass without an agreement.
“I’m happy with the conversation we had and I’m sure that we can come to an agreement,” said Lucas. “Or, if there’s no agreement, then perhaps we don’t need to try to raise people’s taxes.”
The committee substitute was met with a strong rebuke from Mayor Sly James, who took exception to Question 3 of the proposal – which would combine flood control with a neighborhood sidewalk repair initiative. According to James, bond counsel would not sign off on that combination. Last month, bond counsel surprised the City Council with an opinion that the $800 G.O. Bond ballot language would need to be split into separate questions and grouped by like category.
“That’s exactly what the bond counsel said that you cannot do,” said James of the committee substitute’s proposed Question 3. “Flood control is a standalone issue, and public buildings is a standalone issue. Him doing that effectively wipes out neighborhood sidewalks.”
James added that he couldn’t support a plan that contradicts the bond counsel’s opinion, calling it a “safe bet” to support the proposal outlined by the city’s Finance Department at the joint committee’s previous meeting, on Dec. 22, 2016. Under that proposal, $600 million of the funds – or 75% of the total amount requested of taxpayers – would go under one ballot question related to roads, bridges, and sidewalks. The second ballot question would authorize $150 million for flood control and help unlock more than $500 million in federal funds, while the final question would call for $50 million to be spent on acquisitions and public buildings, a category that would include the construction of a new animal shelter.
“If we do it any other way, then we might have difficulty being able to sell those bonds. If we can’t sell those bonds, then all of this has been an exercise in futility,” said James. “So the safe bet, the legal bet, the conservative bet, the right bet is to follow the advice of counsel that we pay to provide us with very specific advice on this very specific subject.”
Another point of contention during the Jan. 12 meeting was the issue of including million of dollars in the G.O. Bond package to make Starlight Theatre compliant with the Americans with Disabilities Act (ADA). In 2012, KCMO reached an agreement with the Department of Justice that ensured the city would begin a $100 million undertaking to bring public buildings into compliance with ADA requirements. According to City Manager Troy Schulte, the top priorities listed by the DOJ were the Swope Park pool, Starlight Theatre, and City Hall. Mayor James indicated after the committee meeting that if the city is deemed to have broken the terms of that settlement agreement, it could face fines of $50,000 per day.
Finance and Governance Chair and 1st District Councilman Scott Wagner spoke to the realities regarding the ADA issue in a conversation on Friday, Jan. 13.
“If there’s just not the money to spend, now we’re in the position of having to tell the department of Justice that we can’t do this anymore,” said Wagner. “It’s a contract, in a sense, like any other. The city agreed to do something, and if they don’t do something, then there are repercussions.”
Wagner also stated his opposition to the newly-introduced ballot language, saying that he was prepared to pass the initial plan out of committee on Jan. 12. As it stands, Wagner expressed concern that the divisiveness of the Council could negatively impact public perception of the $800 G.O. bond issuance, which polls show is supported by roughly 60% of voters.
“If we can’t get to some level of consensus by the end of the day on Thursday the 19th, then the risk that you run is that people will think that maybe this isn’t good,” said Wagner. “This next week is going to be very important.”
Another potential issue that might effect Northeast voters is the sudden disappearance of the Kansas City Museum from Council discussion. Question 3 of the James-backed ballot language initially included specific language regarding the dedication of funds towards the renovation of the Museum’s Corinthian Hall, though that was never mentioned when the joint Council committee reconvened on Jan. 12. While funds for the renovation of the Museum’s Corinthian Hall could still be wrapped into the $50 million dedicated for public buildings in the originally proposed three-question plan, Lucas’s committee substitute includes no mention of funds for public buildings at all.
On Friday, Jan. 13, Kansas City Museum Executive Director Anna Marie Tutera offered her support for the James-backed plan, stating her hope that the Corinthian Hall renovations could indeed be included as part of the $50 million being dedicated for public buildings.
“I still believe that what Mayor James is proposing is the best option for the Kansas City Museum and other public projects. At the last meeting, the Museum was clearly named along with the animal shelter,” said Tutera. “I think what would comfort me, at this point in time, would be if public buildings were included in the bond package. Private funders want to know that, as a municipal entity, public funding is going to be available for a project of this size.”
Councilman Wagner agreed, and has thrown his support behind the ballot language introduced on Dec. 22.
“Everything in here was a necessity, offered advantages to the city, and created projects that wouldn’t be completed otherwise,” said Wagner. “This was a good and thoughtful approach to handle the debt associated with it.”
“It finally gets the Museum open and operating as a traditional museum, and it allows a real sidewalk plan to be done without assessment,” Wagner added.
James was unequivocal in his support for the original ballot language.
“This is balanced; every part of the community has a particular need,” said James. “I have not changed, I will not change, and I will not support anything that is unbalanced.”
Check back with the Northeast News next week for further details about the impending special session, the regular-scheduled meeting of the joint T&I and F&G committee, and the looming deadline to submit ballot language for the April 4, 2017 election.