Sunday, December 16, 2018

NEWSFLASH!!! NEW KANSAS CITY AIRPORT MATH DOESN'T ADD UP!!!



Actually, our blog community has been asking many of these same questions AND we've been talking about the 4-BILLION dollar number before anybody . . . However, this post is DEFINITELY worth a look because it accounts for the fuzzy math put forward by the #BetterKCI crew.

Checkit:

Save KCI: Would You Underwrite This Loan?

Money line:

"If one divides $4.38 billion evenly over 35 years, that’s roughly $125 million in payments per year. According to the most recent Annual Report, the TOTAL operating revenue before expenses of the Aviation Department in 2018 was $128 million. Less operating expenses of $82 million leaves a profit of $46 million before amortization, etc.. Deduct those expenses and add in non-operating revenues, the Aviation Department netted about $36 million."

"How does one make a $125 million payment with $36 million? This question is seemingly beyond absurd but in several calls to people much smarter than I, in positions to both know and slap me in the face with the explanation, I’ve received essentially, “I don’t know.” So I’m going to put this out there and invite someone to show me the obvious that I’m missing."

You decide . . .

17 comments:

Anonymous said...

Don't worry. KC taxpayers are going to pick up the tab. That's how these things always work out.

Anonymous said...

Pass the donuts. We can rest knowing good people are handling this.

Anonymous said...

^^^ Lulz

Anonymous said...

"If one divides $4.38 billion evenly over 35 years"

...and since that's not how it's done, the question is a stupid one.

Anonymous said...

Hard to say who should be more embarrassed here. All the Council folks running for Mayor who have not brought this up or news media who seem only interested in showing pictures of 3D models.

Anonymous said...

Why don't you enlighten everyone then, 7:14? Is it more in the beginning or is there a balloon at the end?

Anonymous said...

It's a shell game. They're using math that doesn't work to trick the public. This is the biggest heist Kansas City has ever seen and what's happening is going to bankrupt KC. If you want to blame somebody, blame Sly James, Jolie Justus and every one who keeps voting for this thing.

Anonymous said...

We're a non-profit educational foundation in KCMO (I won't use our name) and we've had several conversations with Council members about problems the airport has had in the past complying with federal environmental laws. These conversations show that some Council members know there are serious, maybe fatal, problems with the existing KCI plan. But several of these are running for major. Now, you might imagine that as a prospective major, one of these folks would like to step in and clean up this mess. Nope, just the opposite. Nobody wants to be that person who rushes into the party to throw a turd in the punch bowl. What, and be demonized as a naysayer by the politicos who are all in for this turkey? Safer to let this thing flat-line, then rush in and pretend you had nothing to do with it. "I was in the dark, like everyone else..." Of course, the taxpayers will be on the hook for cleaning up, if this colostomy bag of a project explodes, but most Council members will walk away with implausible deniability.

Anonymous said...

I NEVER HEARD OF BOND AMORTIZATION PLEASE HELP ME

Let's use the following example to illustrate the amortization of premium on bonds payable: A corporation issues bonds having a face value of $1,000,000 and receives a premium of $60,000. The bond premium occurred because the bonds' stated interest rate was slightly greater than the interest rate required by the investors in the bond market.

The corporation records the bonds as follows: debit Cash for $1,060,000; credit Bonds Payable for $1,000,000; credit Premium on Bonds Payable for $60,000. The Premium on Bonds Payable is a liability account that must be reduced to $0 by the time the bonds mature. Reducing the Premium on Bonds Payable each period by a logical amount is called amortizing the premium on bonds payable or amortizing the bond premium.

Since the premium of $60,000 is related to the interest rates when the bonds were issued, the amortization of the premium involves the account Interest Expense. If we assume that the bonds will mature 20 years after they were issued, then each year the corporation will make this entry: debit Premium on Bonds Payable $3,000 and credit Interest Expense $3,000. As you can see, the $60,000 difference between the $1,060,000 it received and the $1,000,000 it must repay is reported as a reduction of interest expense over the life of the bonds.

Reducing the balance in the account Premium on Bonds Payable by the same amount each period is known as the straight line method of amortization. A more precise method, the effective interest rate method of amortization, is preferred when the amount of the premium is a very large amount.

jesus, what fucking idiots you people are

Dax said...

The amortization @8:51 know his stuff but he's trying to do some serious misdirection.

Save KCI has the more accurate depiction of the financial situation facing the airport while the KCI supporters ate just playing numbers games.

The airport is off the rails.

They only way they can save face is by trying to make the public feel stupid by playing financial games. Not even used car salesman also try the same methods.

Anonymous said...

Here are some ways to raise the extra Billions needed to get to the final price tag:
1. Tax text messages in California. They brought it up and like stupid taxes and it won’t affect KC texters.
2. Tax airport food that doesn’t seem nutritious 25%.
3. Tax the KC Star editorial board $10 for every letter they use in an editorial that is left wing-liberal-tofu-Volvo-green-anti-Trump/Republican. While this could easily pay for 2 airports- any excess cash could go to a campaign to start a Balanced Newspaper that accepts no tax breaks (does the Star really contribute money to the ballet while accepting tax breaks? Look at the nutcracker program and you decide)
4. Tax bow ties.
5. Tax any taxes that KC issues @ 1% and make KC pay.

Hold special geographic election in a special area- like the street car election - and limit that area to anyone who has been homeless and had bleach poured on donated food.

Anonymous said...

"So I’m going to put this out there and invite someone to show me the obvious that I’m missing."

The obvious is Slie and the gang is using smoke and mirrors to deceive everyone. They do not want this failed project's flaws exposed. Once exposed some of the taxpayers might realize all taxpayers have been had.

The math being used for the numbers game is referred to as "Common Core Math".

Anonymous said...

your math doesnt work because you didnt calculate in interest on the loan. so its more than $125m per year.

Anonymous said...

you only bring this up to aggravate.
The proposed airport in singularly idiotic.
Apparently some want to build it to make that clear.

Anonymous said...

Lost in all this is KCI is so fucking convenient and almost perfect for our area. I've traveled a lot and will take KCI over all of them.

Anonymous said...

Alright, the nice realtor has ran you and your starry eyed wife around all the new suburban developments, the great view condos and fairway mansions. Been fun, now it's time to call the contractor back about that remodeling project that fits your budget.

Anonymous said...

All of this would have been avoided if they would have left the original agreement with Burns & McDonnell stand. Our City Council screwed this up Again.