Saturday, October 29, 2011

Fact Checking the "Fact Checker"

Shelby Sebens of the StarNews has finally decided to "fact check" some statements made in the City Council race.  This is a welcome and unexpected development.  Unfortunately, our "fact checker" needs a bit of fact checking herself.
"Fact check": "The newly opened Wilmington Convention Center isn't being paid for with room occupancy tax."

I've already made my opinion on this abundantly clear.  The city had to go into a fund of about $14M this year to keep the convention center from going into the red.  The difference between the costs and the revenues for the convention center are about $5M.  At that rate, the $14M will be dried up in a matter of years.

If you read closely, you'll see the majority of this "fact check" actually supports what I've said.  The one thing that contradicts it is this:
Wilmington Finance Director Debra Mack says the latest models show the convention center will remain solvent through 2038, when the debt is paid off, with revenue from the parking deck and room occupancy tax funds.
Ahhh yes, a "model." I wonder what the assumptions are for that model, because, you know, models can be tweaked. Do you think Shelby actually took a look at that model and the assumptions in it or simply took Debra's word? If you think she looked at the model, I've got a Skyway Bridge to sell you.

Now, I've found Debra to be extremely professional and competent, but any rational person would have doubts after reading this:
Even if the city can find a hotel developer to build next to the convention center, new financial models show the newly-opened facility running in the red by 2020.
Who was that written by and when was it written? It was written by none other than Shelby Sebens in a StarNews article less than a year ago. I guess our financial situation has improved so much that the convention center is suddenly more viable!

Can anyone do anything but shake their head in disbelief?  Apparently, the model has changed and there's not even a mention of how it changed.  Is that investigative journalism?

Simply look at the events section of the convention center website.  There are five events booked in the next four months!

If you believe this new model rather than the old one, $2M in room occupancy tax and a scant amount in rental fees are going to be enough to pay over $7.5M a year.  It's crazy.  I don't even mention parking deck revenues, because there are no parking deck revenues (something Debra Mack might want to look into)!  There's an $800k deficit in the parking fund.

Of course, Bill Saffo says things like there are hundreds of events booked at the convention center and he's never fact checked.  Do you see those events booked when you walk or drive by?  Are they listed on the website?

"Fact check": "Funding for street and sidewalk repairs is decreasing."

Shelby doesn't attribute this to anyone, but just says "candidates" in general have mentioned this. 

She then goes on to say that the funds for streets and sidewalk repair increased by $250k this year.  That's true.  However, does Shelby's memory (or knowledge) only go back a year?

Let's take a look at two years ago:

(This information can be found at pg. 26 in the pdf here.) 

As you can see, the roads budget decreased from $10M two years ago to $1M today.  That is exactly what I've been saying this entire time.

Is it fair to only look back one year when looking back two years gives a vastly different impression?  Apparently, Shelby either doesn't know or care.

"Fact check": "The Cross City trail is behind schedule."

Here's what the article said I said:
Fulton recently criticized that [the Cross City trail is] behind schedule and missing parts.
To my knowledge, I've never put my criticism like this.  What did I actually say in the Green Builders forum, which is the only place I can recall publicly commenting on the Cross City trail?
"The third leg of the Cross City trail is about a year behind schedule."
And what was said in the supplemental documents for a City Council meeting just a month and a half ago?
In an agreement entered into on January 25, 2011 between the City of Wilmington and the NCDOT, the completion date [of the third leg of the Cross City trail] was extended to September 30, 2011.

The North Carolina Department of Transportation has agreed to an additional extension of the completion date of the project until June 30, 2012.
The original completion date was Sept. 30, 2011, which was then extended to June 30, 2012. Do you not call that being about a year behind schedule?

But that's not the end of the "fact checking."  After saying that "overall the project is ahead of schedule" (because its not taking the 20 years they originally gave themselves,) the article says:
The first phase and part of the second phase of the project was completed in January, a few months past the construction deadline.
Yes, folks, it's "past the construction deadline," but it's still ahead of schedule.  Then the article says:
The third phase of the project was also a couple of months later than the construction completion date.
Of course, the use of the word "was" indicates that this is past tense and everything has already been completed.  The article then goes on to say:
What's left: The bridge that will span the Bradley Creek Floodway joining the College Acres neighborhood to the Autumn Hall Development is expected to be bid and awarded by December and take five months to complete.

The intersection improvements at Shipyard Boulevard has a final design and once permitting and easement acquisition is complete, construction on that section will begin. This should occur within the next few months, Beatty said.

Other sections...
Etc., etc.  It goes on to list a whole slew of sections that have not been completed.  Isn't it curious how this section that "was" completed still has construction on it?

I never made the claim attributed to me, to my knowledge.  I mentioned specifically the third leg and my claims are supported by city documents released just a month and a half ago.

(P.S. StarNews, if you're actually interested in getting a story, go to Rill Rd. and ask the people there if the construction on the Cross City trail has been efficient.  It's a complete nightmare and they'll tell you so.  They'll give you facts and pictures to back it up.  However, I believe they've already been in touch with you and you've reported nothing.)

Fact Checking the StarNews

Of course, I don't have time to fact check every distortion the StarNews publishes, but let's just mention a few stories that I know the StarNews knows about and has decided not to report on.

Story the StarNews knows about but is not reporting: The City of Wilmington has a $37.7M unfunded liability as a result of underfunding their Other Post-Employment Benefits program.

I have brought this to Shelby's attention, as I have to other people in local media, and they've simply chosen not to report it.  This unfunded liability is going to put the city under an enormous burden, but apparently the Cape Fear Fair livestock exhibit is more important to report on.

Story the StarNews knows about but is not reporting: The City of Wilmington's Home Ownership Program gives out second mortgages at 0% interest and the approximately $1M program has a deliquency rate of five times the local average.

I brought up this program to Shelby at least eight months ago or so, and the response I got was basically, "Yeah, I've heard about that but don't know too much about it."  How's that for investigative journalism for you?

Fact Checking the Incumbents

Since the incumbents aren't "fact checked" in this, I'd like to provide some fact checking of my own.

Bill Saffo and Margaret Haynes: "Half of the city budget is spent on public safety."

This is the granddaddy of them all, and has even been blindly regurgitated by the StarNews.  It's used to make it seem like the City Council is being conservative with your money, like they're only spending money on essential services.

Let's take a quick look at budget figures.  The total city budget is about $128M.  The total Police Department budget is about $24M.  The total Fire Department budget is about $15M.  That adds to $39M, not even close to half of the total city budget.

What happens is they refer to the general fund as the entire city budget and they expect you to be ok with it.  They spend millions of dollars in other funds: the convention center fund, fleet maintenance, parking, the golf course fund, technology replacement fund, etc.  Are we not supposed to include this in the total budget?

I brought this up all the way back in February to a StarNews reporter who reported the same distortion.  Here is the response I got:
"Thank you Mr. Fulton. I will ask them about this when the city reopens tomorrow. I've never seen that before."
As you can see, the author isn't going to look up the information for him or herself, but is going to ask the city to explain it.  This is not investigative journalism. It's being a complete lackey for the city.

Laura Padgett: WAVE has 2 million unique riders.

This was said during the Green Builders debate and I called her out then.  Nevermind the fact that "unique rider" in WAVE world doesn't mean the same thing as in the real world.  There are only 200k people or so in the county, so it'd be virtually impossible to have 2 million "unique riders" in this county.  "Unique rider" in WAVE world means number of times people have purchased trips on WAVE, regardless of the actual number of people who have done it. 

The real issue, however, is that for the last fiscal year the number of "unique riders" was given as 1.5M.  Ms. Padgett then suddenly bumped it up to 2M.  Are there any numbers to back this up?
Ron Sparks: Criticized the p-card story in the StarNews.

Ron was particularly assertive in his criticism of this story, calling it out in two separate debates.  Had he even read the story at the time he was criticizing it?  I know the answer to this question, and will say that if I were a journalist in the local media, I would be asking this question.


  1. Hi Joshua,
    I can provide some clarification to a couple of your points about the convention center funding models and some things we (The StarNews) have reported.
    I sat down with finance director Debra Mack a couple of months ago to write this article about the convention center and its funding:

    She gave me a detailed spreadsheet that shows which figures she's using for the models.
    Here are some of the assumptions the models make when calculating the fund balance for the Convention Center:
    -The model of room occupancy tax revenues for the convention center fund is based on a 4.4 percent growth rate annually beginning 2012 (assumes 2.2 percent growth in room nights and 2.2 percent growth in inflation). That excludes the convention center impact and statutory changes.
    -It assumes the adjacent hotel is open by 2014 (40 percent reduction in induced room nights through 2013)
    -Assumes 290 cars per day are parked in the deck and 218 induced room nights by fiscal year 2017.
    -Assumes 3.5 percent interest rate on the convention center fund beginning in fiscal year 2014 (for current fiscal year the interest rate is .4 percent; 1 percent in 2012 and 2 percent in 2013).
    -Assumes taxable financing accommodates 318 private use parking spaces out of 581 total

    And here's where it addresses the past article about the convention center "running in the red by 2020":
    -It was stated at the meeting Shelby covered that "running in the red" would happen if the council decided this year to factor in "leftover" money from the convention center construction costs to go ahead and pay back the city's general fund (since taxpayer dollars were borrowed) $2.1 million for land purchased for the Convention Center. So, yes, there was a model presented that showed the Convention Center running in the red by 2020.
    However, Debra advised against changing the budget that way, so the council did not vote to pay back the city’s general fund at one time. If the council decided to go ahead and pay off the land purchase, then the model would have changed to show negative numbers on the budget line in the spreadsheet for 2020. The spreadsheet, using the assumptions I listed above, still assumes $1.06 million in the Convention Center fund balance in 2020.

    The line items in the spreadsheet calculated to find the projected fund balance include the following for each fiscal year and use some of the assumptions I mentioned above:
    -Room occupancy tax revenue
    -Net parking revenue
    -Debt service
    -Capitalized interest revenue
    -Expenses prior to opening
    -Estimated project closeout
    -Operating deficit increase (convention center isn't making money off the events alone)
    -The amount of money from room occupancy tax revenues that the city hands over to the Convention & Visitors Bureau each year (since, before the convention center funding model, the CVB received a portion of ROT revenues for marketing/tourism expenses)
    -FF&E reserve
    -Interest income

    The spreadsheet to which I'm referring might have changed since I last spoke with Debra Mack in the city's financing department. I am not supporting or repudiating your claims. You questioned the terms of the models, so I just wanted to point out some of them to you (in attempt to clarify some of what we have written). The information on the spreadsheet is public record from the city’s finance office for anyone interested. I hope that helps some.

    Shannan Bowen, county government reporter for The StarNews,

  2. "-Assumes 290 cars per day are parked in the deck and 218 induced room nights by fiscal year 2017."

    This is 218 induced hotel room nights *per day* because of the convention center? Has anything like that even come close to happening during the time since it's been open?