IS IT TRUE August 14, 2013 Part 2

IS IT TRUE an unannounced meeting of the Salary Advisory Committee 10:00 am this morning in the Mayor’s office was called by the Mayor to discuss about 5 to 8 new positions within the Evansville Water and Sewer Department?… that one of the new position requests may  a $20,000 raise to new city Water and Sewer employee Mike Duckworth?…we shall keep you posted on the happenings of this non announced meeting?

IS IT TRUE the speakers from last night’s meeting at the library regarding the proposed downtown hotel were in near unanimous agreement that the empty lot where the Executive Inn was once is a great place for a hotel and parking garage?…there was even near unanimous approval that these things will help with conventions?…when the discussion moved to how the hotel and its accessories should be paid for the agreement ended?…there were the starry eyed dreamers who really seem to believe that just another $37.5 Million gift to land a hotel and parking lot will instantly transform downtown Evansville into a sparkling vibrant city and that this needs to be supported at all cost?…there were many such people in the room as they had been recruited by the Chamber of Commerce, Mayor Winnecke, and others who have an agenda to move this project forward the way it is right now?…there were an equivalent number of people with a more realistic view of economics that ranged from free market people who think subsidies are just wrong to others who think some subsidy like a traditional tax abatement would be okay but handing out cash like Halloween candy is stupid and counter competitive?

IS IT TRUE that one attendee asked the attorney for the group of hoteliers why this hotel is not being undertaken by some local company?…the answer was for the record that they would if the project was capable of turning a profit as they have all proven by investing in hotels in the suburbs?…it was touched on last night and we do not think it has been touched on before that roughly $10 Million of the deal for the hotel alone are developer fees that will go straight into the pockets of the developer from the pockets of the people of Evansville?…the developer is free to sell the property after 5 years and keep ALL OF THE PROCEEDS?…it would not be the first time that such a stunt has been pulled?

IS IT TRUE that while the City of Evansville has been busily laying the groundwork to follow the mistakes of many other Midwestern cities by betting the last of the discretionary money on hotels, dog parks, and other assorted brick and mortar temples to fun and games the Obama Administration has been running up more white flags of surrender in the implementation of ObamaCare?…first came the delay of ObamaCare’s Medicare cuts until after the election?… then there was the delay of the law’s employer mandate?… then there was the announcement, buried in the Federal Register, that the administration would delay enforcement of a number of key eligibility requirements for the law’s health insurance subsidies, relying on the “honor system” instead?… now comes word that another costly provision of the health law—its caps on out-of-pocket insurance costs—will be delayed for one more year?…according to the Congressional Research Service, as of November 2011, the Obama administration had missed as many as one-third of the deadlines, specified by law, under the Affordable Care Act?…it seems as though there is not a governing body left in this country that can actually put together a cogent plan for anything at all and follow it up with even a half assed implementation?…ObamaCare is the proof that the Evansville City Council needs to VET the hotel proposal completely and take as long as it takes to come up with a contract that is acceptable to the people of Evansville?…it will be interesting to see if 5 members of the City Council will have the courage to step forth and insist that this is VETTED as it should be prior to humoring Mayor Winnecke with a vote?

IS IT TRUE it appears now that when you account for the debt servicing of the bond issue over the 25 years ($2.6 Million x 25 years) this project will actually commit tax payers to the minimum of $65 million?…when you add the $13 Million already paid to clear the Executive Inn or the massive construction interest and legal fees associated with the project the taxpayer damages on this gamble is massive exceeding $78 Million?… the City is downplaying the fact that Evansville is the biggest investor here in releasing costs of $38Million from the investors from Branson and $37.5 Million from the taxpayers of Evansville?…that casinos operate with rules that return up to 99% of every dollar pushed through electronic games of chance?…if any one of us could find a SUGAR DADDY that is dumb enough to match our investment in casino action dollar for dollar we would be statistically guaranteed to walk away a big winner?…in such a scenario where $75 Million was in play, the casino would win their standard operating margin, the receiver of the matching funds (HCW) would win big, and the idiot that matched the casino play (City of Evansville) would be guaranteed to lose their entire investment?

IS IT TRUE According to the Hunden study (the $105,000 City study upon which it relies), the new hotel will be filled only 30% by the new business generated due to conventions; so the remaining 70% will need to come from existing heads in beds that must be stolen from existing Evansville hotels?…if our hotels lose this business because of this need to attract patrons that would otherwise have stayed in an existing hotel, jobs at those hotels will be lost?…based on the numbers from the Hunden Study we will amend our estimate yesterday of 55 – 65 jobs created down to more like 20 – 25 net new jobs created by the new hotel?…taking $37.5 Million from the taxpayers to create 25 permanent low wage jobs and 150 temporary construction jobs makes the Obama Stimulus look like an economic success story?…it even makes Solyndra look like a success story since they did actually employ about 1,000 people for two years before filing for bankruptcy?…of all the possibilities considered during the 2011 Mayoral election, the Winnecke Administration making President Obama’s economic performance look superior was not something anyone even thought possible?

IS IT TRUE Bob Warren, the CVB director has spoken about how convention planners will now come to Evansville?…that is a complete misstatement according to the industry EXPERTS the City of Evansville hired to do a study of such things?…according to the Hunden study the majority of planner’s poled – 60% – said they will NOT consider Evansville for their conventions?…40% said they would likely consider Evansville?…in other words, doing this project gets less than half of those planners to just consider Evansville – nothing more?…there is more than just a hotel that will keep convention planners from considering Evansville for conventions?…we may need to consider something other than conventions and ball games as our economic savior?…infrastructure that works is something that has held Evansville back for years and it continues to do so no matter how many ball fields, hockey rinks, or skateboard parks we may build?…this is a failed policy of people mired in the 60’s and devoid of any knowledge about trends and technology?

IS IT TRUE the CCO Moles are telling us of several instances of intimidation attempts directed at board members of the CVB by members of the Vanderburgh County Council designed to get the City of Evansville’s paws on $3.5 Million of the Innkeepers Tax dollars that were in play for soft balls fields?…to use the hand of government to take Innkeeper’s Taxes from the hands of existing hoteliers to give to a competitor is right out of the playbook of Lenin, Brezhnev, and Stalin?…Karl Marx founded the Communist Party on the premise that “we (the central planners) take from each according to their abilities and redistribute as we choose according to needs”? …the American veterans who have fought and died to stop the spread of communism are most likely rolling over in their graves in amazement at the audacity of the government of an American city to take from one businessman to fund his competitor?…this is an insult to the Constitution and our free enterprise system?

IS IT TRUE it was extremely obvious at last night’s City Council meeting that people in attendance were on both sides of the issue concerning building a downtown Convention Center Hotel?…we were impressed with how 7 out of 9 City Council listened and ask intelligent questions concerning this issue? …we believe that those 7 of 9 council members are open minded about how to fund this major capital project in a responsible manner or not to?… we were stunned to see City Council members Weaver and Mosby wear a sticker supporting a building a new downtown Convention Hotel during the meeting?…it looks like Weaver and Mosby have made up their mind without having all the financial facts given to them?…the unlearned pair are seemingly committed to ignore the VETTING that has finally started before they make up their minds on this issue? ….that Ms. Mosby’s soon to be announced primary competition has documented her political behavior on this issue this evening?…he told his supporters this evening about what a great TV ad this shall make?

IS IT TRUE that it was also obvious to everyone in the room that there were many union members in attendance wearing their colors in support of the project?…they also have their minds made up based on self interest as opposed to what is the best thing for all residents of the City of Evansville?…of course we all understand that jobs are important but public works jobs need to be for things that are priced fairly and are beneficial to everyone who pays taxes and not just a couple of hundred union members?…there are plenty of necessary jobs on basic infrastructure like the EPA mandated sewer projects to keep the trade unions of Evansville in work for many years?…it is disappointing to see our friends and neighbors wear the buttons of “what’s in it for me” without knowing anything about the financial value of the project?

IS IT TRUE that the claims by Mayor Winnecke that this hotel will be hiring 200 permanent employees needs to be examined for sanity?…that 200 jobs that average $10 per hour plus benefits and social security taxes will generate a payroll of roughly $5.6 Million per year?…that if one were to assume a rate of $100 per night and 60% occupancy that the 253 rooms can be expected to take in revenue of $5.5 Million over the entire year?…that is less that just the payroll without accounting for utilities, maintenance, replacement of fixtures, etc.?…this simple bit of math is why the claims of 200 – 250 permanent jobs are simple pulled from the hip and not based on any realistic financial projections?…Hotel News Now a trade publication for hotels did a study of 5,100 hotels nationwide to learn what the payroll expense for hotels really is for well managed properties?…for this region that number is 25% to 30% for mid range properties?…in the case of this hotel and its assumptions we can expect a payroll expense of about $1.65 Million?…that will be enough to employ between 55 and 65 equivalent full time jobs?

IS IT TRUE that another little back of the envelope calculation will put some sense of reality on the claims that 800 construction jobs will be created by this project?…if one uses a two year completion time and the $75 Million budget this equates into $37.5 Million per year?…if a labor content of 35% is used as is advised by several publications on estimating hotel construction that leaves a labor budget of $13.1 Million per year?…at a burdened hourly rate of $40 per hour one would arrive at 32,800 hours of labor in each year’s budget?…that works out to 6,310 hours per week or 1,262 hours per day?…at 8 hours per day we can expect between 150 and 160 full time equivalent jobs from this construction project?…this is all really just simple arithmetic but our elected officials just can’t seem to grasp it?…we wonder are they lying or are they just numerically inept?