Paul Soglin: Waxing America

Blind Squirrel Finds Acorn: WSJ Endorses Russ Feingold

In spite of wrong-headed editorial endorsements of Scott Walker, Chad Lee, and Paul Ryan, the Wisconsin State Journal managed to get one no-brainer right: they endorsed Russ Feingold over the Fortunate Son-In-Law today.

...Though likeable and impressive on business issues, Johnson was sketchy on most everything else.

He simply didn’t deliver the goods.

...Feingold is still the best candidate for this difficult job. His national prominence, independent streak and careful spending habits make him more likely than Johnson to get things done.   

No joke or zinger today; this is too important. Waxing America readers should do whatever they can in the next two days to prevent the tragedy of losing Russ Feingold as Wisconsin's US Senator.

- Barry Orton

More GOP Dancing In The End Zone Before The Game Is Over

Rep. Joe Barton (R-Texas A&M) has already declared he's got the Chairmanship of Energy and Commerce locked up:

Barton, the top GOP member of the House Energy and Commerce Committee, suggested that he fully intends to push a bid to become chairman of that committee, despite rules and colleagues' concerns that could threaten his ability to take that post. Barton's apology to BP CEO Tony Hayward over the summer was a gaffe that troubled many members of Barton's own party.

Joe Barton chairing Energy and Commerce again?  We might as well have W. back in the White House.  Be afraid. Be very afraid. And GOTV Tuesday. Survival of the whole goddamn planet depends on it.

- Barry Orton

Big Pharma Shill Pat Boone Robocalls Love Letters For Fortunate Son-In-Law

This would be funny if it wasn't so sad: 50's white bread singer Pat Boone, the spokeshill for sleazy Big Pharma sock-puppet group 60 Plus Association, is voicing robocalls for the Fortunate Son-In-Law. The Wisconsin State Journal's Clay Barbour makes a bad joke about it, but doesn't point out Boone's work for groups that have fought health care finance reform for years, or Boone's vile statements on gay rights and on Barack Obama's citizenship.

You can insert your own white suede shoes or Little Richard joke here. I'm too disgusted to even try.

- Barry Orton

 

Ron Johnson Makes Final Pitch To Onion Readers; Wisconsin State Journal Still Not Sure

In the Onion, Ron Johnson's appeal makes sense:'

Ladies and gentlemen, isn't it time you elected someone who only learned five minutes ago that there are three branches of government, not 14?

...While Russ Feingold likes to talk about how he's worked across the aisle and fostered relationships with both John McCain and members of the House of Representatives to pass campaign finance reform, I am proud to say that, as a political outsider, I could not begin to tell you what an aisle is or how the House of Representatives is remotely involved. Furthermore, who the heck is John McCain?

So far no major Wisconsin newspaper has been able to argue that the Fortunate Son-In-Law would be better for Wisconsin in the US Senate than Russ Feingold, not even his hometown Oshkosh Northwestern.  It would be a shame if the Wisconsin State Journal even tried; they would probably be taken as seriously as the Onion.

- Barry Orton

Overture Center for the Arts: Some Fiscal Issues

Overture deserves at least another $500,000 from the city of Madison

At one of our first meetings of the Ad Hoc Committee on Overture, I asked for data showing the trend of city support for the facility. Simply put, the city of Madison should provide an additional $500,000 in funding if it were to fund Overture at the same net rate as a percentage of the city budget (.75 of one percent*) as it was funding the Civic Center. That amount would be a reasonable contribution for a community of our size, and would restore city funding to a sum proportional to the city budget and be closer to a thirty year tendline than the current $1.4 milion contribution.

It means the city subsidy would rise from $1.8 million in 2010 to $2.3 million in 2011. Subtract the PILOT and the net is approximately $1.8 million.

Say "No" to Eliminating the PILOT and Segregating Parking Revenues for Overture

There are two gimmicky requests by the Overture operators. Both are matters related to issues larger than Overture and have nothing to do with the amounts. The first is to remove Overture's obligation to make a payment in lieu of taxes (PILOT) to the city of Madison. Overture, like the old Civic Center, and many other non-taxable city enterprises, makes these payments so we have acknowledgement of the value of city services to this tax-exempt property. This is a matter of fiscal responsibility and has nothing to do with lack of concern or respect for Overture.

Overture also requests that it be allowed to collect a parking surcharge on vehicles parked in the nearby city parking ramps on nights of major events. This is a horrid precedent and should be dead on arrival. Madison makes it a point of never segregating revenues unless they are tied to a specific service for which there is a charge.

If Overture needs more revenue from the public, then be up front. 

Most disturbing was the Overture consultant, AMS, portraying the parking revenue matter in a deceptive light which, for me, is just one more indicator that the study is not to be trusted. The report indicated there was a precedent in "Madison" for such a parking revenue dedication to a related event. It turns out they were not referring to a city of Madison practice but the University of Wisconsin - Madison using parking revenues generated by athletic events for the UW athletic program.

Maybe Overture Should Receive an Additional $500,000 from the city.

A validated study, one with public confidence, might justify an additional $500,000 from the city of Madison, bringing the total of additional subsidy to $1 million. That number, parenthetically, would give Overture more than the net amount it is asking from the city in additional revenues, capital budget commitments for the next 15 years, and cuts in payments to the city. End the gimmickry and provide Overture with a reasonable amount of support.

If the city subsidy for Overture was calculated as a percentage of the actual revenues for the facility, increased support is warranted.

The positive attribute of this view is that it reflects greater city commitment based on the public buying tickets and private contributions for performances. The negative attribute is that while the city signed on for a facility the size of the old Civic Center, it never agreed to support a structure as opulent and costly as Overture.

In the last two years of the Civic Center and the first two years of Overture, 1999-2002, the percentage of public support for the facilities averageded about 22% of actual revenues. If the city were to continue that level of support for Overture the net contribution would be about $2.64 million, a gross subsidy of $3 million.

Additional City Funding Comes With Strings

Before signing off on the additional funding, there are three significant conditions required of the owners and operators of Overture.

First, 201 State will own the facility. The city of Madison cannot take title to the building because, absent validated numbers about the capital costs and operating costs of the facility, the risk is too great. After all, if the AMS study is accurate, 201 State should have no problem accepting its own report.

Secondly, the board of directors of the operating entity must reflect the public commitment. That means public appointees from the mayor, confirmed by the city council, and recognition that the board cannot be self-perpetuating. This means Overture remains a union house.

Thirdly, the new managing entity must commit to transparency and recognize the rules and statues governing open meeting laws in Wisconsin.

In subsequent posts, I will go into more detail about the significant structural problems that plagued Overture since its inception, as well as how that convoluted arrangement adversely impacted both public access to the arts and public support of the arts.

In addition, I will also detail under what circumstances I would support city ownership of the facility, a recommendation I made over ten years ago and subscribed to until last month, when I realized the enormous costs and liability of owning this iceberg.

Conclusion:

The PILOT stays. The net city subsidy should range from $1.8 to $2.6 million, probably somewhere about $2.3 million.

No parking revenues for Overture. The staff remains public employees.

The facility is not owned by the city of Madison; the city takes no responsibility for the capital costs of the building.

 

* for 2011:  $247,000,000*.0075= $1,852,000

author's note: I was corrected on my last post that the correct name for the facility is the Overture Center for the Arts, not the Overture Center for the Performing Arts which I carefully researched and found at, among other sites, the UW School of Music. Don't believe everything you find on the world wide web.

 

Casey Stengel on the Madison Common Council: "Can't anybody here play this game?"

City Council members end meeting early in apparent protest

In a rare if not unprecedented move, several City Council members left a meeting early in apparent protest of a colleague, breaking a quorum and ending the meeting with business still on the agenda.

The walkout occurred just before 10 p.m. Tuesday, while Ald. Thuy Pham-Remmele was asking questions on one of a series of items she had placed on an agenda for council discussion.

The Common Council of the city of Madison operates under Roberts Rules of Order, unless superseded by a city ordinance.

Roberts Rules of order provides that the members can compel a quorum by use of a call of the house. Rule 41 provides:

 When no quorum is present, if one-fifth of the members elect are present, they may by a majority vote order a call of the house and compel the attendance of absent members...That the sergeant-at-arms take into custody, and bring to the bar of the House, such of its members as are absent without the leave of the House." A warrant signed by the presiding officer and attested by the clerk, with a list of absentees attached, is then given to the sergeant-at-arms, who immediately proceeds to arrest the absentees. When he appears with members under arrest, he proceeds to the chairman's desk (being announced by the doorkeeper in large bodies), followed by the arrested members, and makes his return. The chairman arraigns each member separately, and asks what excuse he has to offer for being absent from the sittings of the assembly without its leave.

All the council needed to do was adopt a call of the house and then require the Madison Police Department to round up the errant members and business could continues. Happy happy, joy, joy.

Government can be fun if you know the rules.

"Can't anybody here play this game?" Casey Stengel

Happy happy, joy joy, Yankees close out season in defeat to modest Texas Rangers

It is no secret how I feel about the New York Yankees.

It was not enjoyable watching the Yankees head towards the American League playoffs as the season closed out, though I did take comfort in their poor September performance. After the Bronx entry in the American League of Professional Baseball Clubs crushed the Minnesota Twins, the prospects of another Yankee appearance in the World Series loomed large.

My hope for Yankee elimination dimmed when the Rangers blew a 5-1 lead in the first game of the American League championship Series.

Thankfully the Rangers got it together and not only defeated the Yankees, but humiliated them in the process.

The Rangers opening day payroll was 27th at $55,250,545, the SF Giants were 10th at $97,828,833.

The Yankees were tops of course at $206,333,389, almost 50% more than  the payroll of the 3rd ranked Chicago Cubs, who cannot win no matter what they try.

There is justice.

Dollars spent per regular season win:

Yankees $2,172,000

Rangers:  $614,000

Cubs: $1,958,000 (sorry Zweifel)

Overture Center for the Performing Arts. Comment Responses.

Tuesday's post, Why Should City Residents Be Coerced Into Expensive Bailout of Overture Center? received many valuable and insightful responses.

Bob D'Angelo, former director of both Overture and the Madison Civic Center, wrote:

MCAD and 201 State were not responsible for the current situation. Investingating the wrong time by the current owner - The Overture Development Corporation caused by the problem with the banks. The operating budget is completely separate and is supported by ticket sales, rentals, fees and a contract with the City to operate the place in the community interest. Thur far the city has saved about $10,000,000 in capital maintenance costs for the old Overture Center.

The real problem is the long term maintenance of the Center. Paul's figure of $120,000,000 over the next forty years may actually be low using examples of what costs were incurred by other centers facing renovation over the years... To solve that pending obligation will take a very substantial endowment.

D'Angelo is correct in that neither MCAD or 201 State are not responsible for the current situation. Unfortunately, they are responsible for two of the current issues. First there are structural problems in the management of Overture. The original design created a board that was  appointed by elected officials but responsible to no elected body. The new board will be even more insulated. That is why the recommended "Focus Model" receives so little support except from those most intimately connected to the problem.  

No one should take comfort in D'Angelos' observation "Paul's figure of $120,000,000 over the next forty years may actually be low..."  Whatever disagreements D'Angelo and I have had over the years is bridged by our shared belief that Overture must have a substantial endowment, a recommendation of our Ad Hoc Committee.

Linda Baldwin, chair of MCAD, wrote:

The City of Madison wasn't involved in the bank debt negotiations because they refused to be. Time and time again, the Mayor indicated that the city would not be a part of the debt settlement...So members of the volunteer and appointed boards, in order to save the Overture Center from going dark or being foreclosed on, moved forward with negotiations with the financial institutions to resolve the debt issue. Conditions of that settlement were imposed by the parties involved and the city was made aware of those conditions during the negotiations.

Invited to sit at the table, but refusing to participate in the negotiations is unacceptable leadership. The city can sit at the table and simply say "no' to participating in the debt settlement. Now the city finds an agreement in place with it owning the building, an unverified economic analysis, management conditions that do not meet its standards, and an unrealistic deadline. Wow.

Tom Bozzo raises one of the most critical challenges inherent in this discussion, one I hope to address in the future:

The real issue to address is whether the percent or so of city expenditures above what would have been spent on the old Civic Center is better spent elsewhere...

I disagree with Tom's categorizing the costs of Overture as being a small percentage of the city budget. In normal economic times even a million dollars is enormous, even though it is less than 1% of the city budget. Viewed by advocates who need as 'little' as $50,000 to continue a program, it is significant. Another was of looking at the issue is to examine the discretionary portion of the budget. As much as 95% of the budget are fixed costs related to basic services, the salaries of those who provide the services, and the equipment they need to carry out the services, ranging from fire fighting and election administration to police and date processing costs.

In a $200,000,000 budget, $1,000,000 is a significant amount. At this point $700,000 represents a significant expenditure in a city with record levels of poverty.

Pete Gruett knows relationships but not proportions. We are not a "tiny Midwestern hamlet saddled with a fancy, New York arts center", but we are a city of 220,000 with an Overture Center for the Performing Arts, a center far more expensive and delicate than anything else in our county, and it is more appropriate for a city of at least 1-2 million.

Given that it took from the 1960's until now for Madison to grow from 160,000 to 220,000, we are not going to hit 400,000 anytime soon, especially since annexation possibilities are virtually eliminated and the city adopted zoning and building codes that inhibit dense development.

 

 

 

Ron Johnson's Jobs Plan Brainfart Leads to First-Ever Green Bay Press-Gazette Endorsement of Russ Feingold

Ron's Johnson's inability to articulate any plan to grow employment beyond the sound bite of "cut government spending" has led The Green Bay Press-Gazette to endorse Russ Feingold for the first time ever: 

Feingold has a solid jobs plan and detailed, specific proposals for controlling spending and reducing the federal deficit. He is a leading proponent of the pay as you go principle that says government should not cut taxes or add entitlement spending without paying for it elsewhere, and he has joined with Rep. Paul Ryan, R-Janesville, in an effort to reduce pork-barrel spending in Washington.

Feingold’s opponent, Oshkosh businessman and political newcomer Ron Johnson, also has voiced his support for spending controls and fiscal responsibility in Washington. His plan for righting the U.S. economy, however, comes across as one-note: establish a hard spending cap, reduce government interference and allow businesses to flourish.

These are principles with which we agree; however, Johnson seemed unable to further articulate his plan for job creation — especially for the middle class — during a recent meeting with the Green Bay Press-Gazette editorial board. Basic principles of restraint are one thing; a detailed proposal to spur job creation and get our economy moving is another.

 

...We think that with time, Johnson could become a viable candidate for national office — but as things stand now, he needs more time to develop and articulate his positions on a range of issues from jobs to foreign policy.

 

Watch the video of the Fortunate Son-In-Law's impression of a deer in headlights:

 

 

 

Now that the Press-Gazette has recognized the yawning chasm between the qualifications of Russ Feingold and those of Ron Johnson, it will be interesting to watch if the Wisconsin State Journal or the Milwaukee Journal Sentinel can find a way to endorse Johnson without insulting their readers' intelligence.

 

- Barry Orton

Why Should City Residents Be Coerced Into Expensive Bailout of Overture Center?

On June 22, 2010, three organizations, critical to the ownership and operation of the Overture Center for the Performing Arts in Madison, Wisconsin, executed a forbearance agreement with a consortium of lenders that were owed over $28 million dollars. In 2005 these lenders provided financing under a complicated financial arrangement that soured when the stock market collapsed in 2008.

Who Negotiated the Deal (not the city of Madison)

The three interested parties included the Madison Cultural Arts District (MCAD), a public body created under state law that presently operates Overture, and the Overture Development Corporation (ODC), which owns the building.

The third member of the consortium was the 201 State Foundation, presently a private fundraiser for Overture and the required new operator of Overture by terms of the proposed forbearance agreement.   

Although the agreement requires certain actions by the city of Madison, as best I can ascertain, the city did not negotiate the agreement. Clearly the city of Madison is not a party to the agreement. This becomes critical since exercising certain parts of the agreement may violate city ordinances as well as state law.

The City is Obligated Under the Forbearance Agreement

The agreement contains three critical elements for Madison residents and their city government.

The terms require execution of the agreement by December 31, 2010. Secondly, the city of Madison must agree to purchase or otherwise take title to the Overture Center and all of the associated risks of ownership. Thirdly, the 201 State Foundation or its chosen successor will operate the facility.

These terms were imposed and inserted by the Overture Parties (MCAD, ODC and 201 State) not the lenders.  The lenders want their money, they do not care who owns the building if they are paid.

The Overture Parties, without participation by the city of Madison or its residents who will pay the bills, imposed these terms. If at any time you believed that the banks imposed these conditions, rethink the matter.

The Overture Parties, without consideration for the time required for a deliberate and thoughtful response by the city of Madison, imposed these terms.

Originally I Supported Public Ownership

When I agreed to serve on the Ad Hoc Overture Committee, I supported public ownership of the facility.  I was committed to making that work and finding the best operating model. I ranked the possible alternatives of ownership and operations as first:  public/public; secondly, public/private; and lastly, private/private.

I am now convinced that private/private is the best alternative.

I arrived at that conclusion for two reasons. First, the cost of owning the building is beyond the resources of the city. Secondly, the controlling entity that operated the building must have a sound management plan, the confidence of the public, and an appreciation for transparency.

In a later article I will detail the specific problems with public ownership, but past history demonstrates that the proposed Focus Model and the forbearance agreement provide sufficient proof that only under the most unusual of circumstances will public ownership or management work.  

The Building Is Too Opulent and Costly To Own

The building is too expensive for the city to own. Overture was designed and constructed with no regard for public ownership. This is evidenced by the soft floor tiles that were meant for walls, not the pressure of high heel shoes.  There are 700 different style lamps (think light bulbs), many of which are not available ‘at retail’ and which are lacking in energy efficiency.

When the lamps are no longer manufactured or when there is a legitimate desire to make the building green, entire fixtures built into the walls and ceilings will have to be ripped out.

Finally, the published cost of the building is incorrect. The facility did not cost $205 million. For the last five years, I used the figure of over $250 million. It is clear that I was wrong. The cost of Overture is closer to $300 million.

This number is critical because it provides a guide as to the long-term capital cost to maintain the facility. These are not the costs of day-to-day operations but the kind of costs associated with replacing roofs and boilers, curtains and seats.

If we assume that over forty years it will cost 40% of the original construction, we are looking at $120 million, not $81 million, already a massive figure.

If the City Owns and Leases a $300 million facility, we need public bids. Transparency would also help.

On the management side, the arrangement for 201 State to operate the facility becomes more unnerving.

The very nature of 201 State negotiating the forbearance agreement, naming itself as operator, and presuming city ownership tells us what lies ahead. 201 State is adamantly opposed to transparency.

Perhaps someone should ask why the city of Madison should provide a public subsidy of over $2.5 million a year to this ‘vendor’ without competitive bid. There may well be other qualified operators, both public and private, interested in running Overture, if there is a guarantee of city subsidy combined with assurance of the city’s contractual obligations to maintain the building.

Of course, the city will probably not want to insult any donors and will manage to determine that bids are unnecessary because of the viability of this single source provider.

Author's note: more soon on structure, finances, the perfroming arts, and the Crystal Cathedral.