TKC EXCLUSIVE AND SATURDAY NIGHT PLAYLIST!!! PUCK PROVIDES A PEEK AT A POSSIBLE KANSAS CITY $75-100 MILLION DEAL TO LURE BACK CERNER!!!
TKC NOTE: One again, and for maybe the 3rd time in 2 days . . . Some MAJOR SCOOP REGARDING THE FINANCES OF KANSAS CITY comes via KICKASS TKC TIPSTERS!!!
Puck does a better and more eloquent job of explaining the sitch then I ever could, so I'll simply hand over the task of explaining the deal to one of the all-time greatest characters who has ever frequented TKC . . . Check it:
Puck Takes a Crack at Big Finance
Puck does not have a lot of money. Thankfully, he doesn’t have much use for currency, being the transient little spirit he is. But he does understand some words and concepts (probably the same ones Jeff Yates is learning in accounting class). Terms such as “budget deficit” and “bond rating” are now part of Puck’s vocabulary, thanks to the state of our City.
So the recent chat about City Hall of a soon-to-be-proposed $75 to $100 MILLION bond issuance gave Puck a bit of a headache. After resting in a darkened room with an ice pack on his little forehead, Puck decided to tackle the story and dissect it for you, dear readers.
Here’s what is being worked on at the Hall… Councilman John Sharp, desperate to bring home the bacon to his sixth district constituents, has been instructing staff (that’s a big no-no, John-Boy), to work the numbers and details out on a $75 MILLION ($100 by some accounts) bond offering in a last-ditch effort to lure Cerner back to the Bannister site. Of course, the Ex-City Manager, Wayne C., was in on the gig, but with his departure, Sharp has had to carry the water himself a bit more. And savvy folks at City Hall (and believe me, there ARE some there!), have been told by the Councilman, “I’ve got seven votes! Get to work on this deal!” Translated, that means Sharp is convinced he can get his little bond scheme passed through council and go to Cerner, goodies in hand, then return the conquering hero (I just pray he’s not wearing gladiator sandals…ewwww!)… so the staff had better find a way to make this work.
This knowledge helps clarify the Mayor’s removal of Councilman Russ Johnson from the Finance and Audit Committee to replace him with Not-So-Sharp, a surprise moved that shocked many. After all, like it or not, Johnson is on top of economic issues and Sharp is, well, let’s just say MAST never really recovered after his tenure there. So, the Mayor, who is shopping for votes and supports Sharp’s plan, pulls Johnson and his knowledge away from F&A and adds Sharp, who is quite the opposite of his name on things financial.
So, dear readers… what does this all mean? Well, let’s break this down into manageable morsels so you don’t have a big Pepto moment.
Cerner is an ENORMOUSLY PROFITABLE company, which in turn makes NEAL PATTERSON (friend of Jeff Roe) and CLIFF ILLIG, the founders, VERY,VERY RICH MEN. (Not rich enough to get Neal’s right-wing wife elected to Congress, but still pretty damn rich.) Cerner DEMANDS BIG INCENTIVES to go anywhere… and Kansas landed the company. JOHN NOT-SO- SHARP is desperate to bring something to the sixth district, and Cathy Jolly is just waiting to bask in the glory as well. So he devises a FINANCIALLY DISASTROUS PLAN to have the City GUARANTEE $75 MILLION in bonds to sweeten the Cerner deal.
Now, this might not sound like anything to get your knickers in a knot about, readers, but it is, and very much so. Here’s why: KANSAS CITY is BUSTED with OVEREXTENDED CREDIT! We have many other pressing needs, like maintenance on our infrastructure, buildings, etc, that WILL NOT BE ADDRESSED if we do this CORPORATE WELFARE John Not-So-Sharp is proposing. And all of those Downtown Hotel Committee meetings… well they can just cease to meet, because this $75 MILLION BOND deal will stomp the hotel deal dead before it ever gets off the ground.
For those of you who aren’t concerned about the Bannister site or the Downtown Hotel project, this financial fiasco Sharp and the Mayor are pushing impacts you, too. Our basic services will go further into the toilet (and be flushed out into the Missouri River until our sewers are fixed), because we will have no ability to issue bonds for anything else. The $75 MILLION gallimaufry of a financial gamble of Funk and Sharp will crucify us in the basic services area. Here’s why:
Our City’s bond rating from Moody’s is AA… pretty good, but Moody’s also has the City on a “NEGATIVE OUTLOOK”, meaning we are trending down; it is also an indication of a downgrade perhaps shortly down the road. But if our credit rating is lowered (and financial friends of Puck’s say this Cerner deal could do it), it impacts CURRENT and FUTURE debt. For example, our beloved Power & Light District is underperforming, causing the City to make up the multi-millions from the General Fund. This is happening with the Convention Ballroom project and others as well. So the General Fund gets sucked dry and into deficit status by paying for these underperforming projects, leaving the City with insufficient funds to pay for basic services, and pushing very critical maintenance out of reach financially.
NOW… add in a new $75 MILLION dollar debt. Our credit rating likely takes a hit. The money the City has already borrowed could have a change in the terms… either an increase in the interest rate the City pays or an acceleration of the payback time. In any event, it will be financially disastrous for the City.
QUICK POINT: Not-So-Sharp was heard just a mere two weeks ago saying that firing the City Manager should not be “RAMMED THROUGH JUST BECAUSE THOSE WHO WANT TO DO IT SUDDENLY HAVE SEVEN VOTES.” (Not exactly Shakespeare, but a worthy quote in this case.) I wonder how true to his principles Sharp will remain when it comes time to “ramming through” a disastrous bond offering. Puck’s not a wagering sort, but he’d bet a few pence that Not-So-Sharp will conveniently forget his outrage of November 19 when it comes time to ramming through his OWN agenda.
On November 19th, council members including Sharp, Riley, Ford, Curls and Sanders-Brooks (Jolly was too busy holding her head in her hands), all griped and moaned about the lack of transparency in city government. Will they be perfect hypocrites and keep this deal quiet until voting time? Councilpersons who vote, nay, even DISCUSS this farcical financial fairytale should have their heads examined. Any voter who re-elects any one of them who supports the scheme should have theirs checked as well.
Puck is off to rest his head; it’s hurting again. ‘Til we meet again…
Big money news provided by one of the best readers of this blog has inspired tonight's podcast.
As always, thank you for reading and have a safe and fun weekend