Wednesday, September 21, 2005

Sports Impact

Sports. They're an important part of our culture. We watch them for entertainment. We participate in them for health and enjoyment. We put our kids in them so they can have fun and to teach them lessons about life and team work. They have an impact on our lives.

Governments often get involved in sports. They take tax dollars and build fields and courts and arenas and coliseums. The reasons are as varied and complex, but in the end the arguments will revolve around money. It takes money collected as taxes to build a stadium or tennis court. To appear frugal and responsible, governments will trot out economic impact studies showing great, positive returns on their investments. Most of these studies are flawed. As the Sports Journal points out here and here and the University of Washington here, most economic impact studies end up being sales tools. The cost of building and maintaining a stadium, field, etc. is seldom recovered by the increased tax revenue before it needs replacing. The jobs created at the bottom end of the pay scale. Even the extra jobs needed to support the event are jobs like motel maid and convenience store clerk. Not high paid, high skill jobs.
So what's my point? If you try to reduce sports to tax receipts and put a dollar amount on it, you miss the point. Sports affects many qualities we expect in a good place to live. They can make people happy. They can keep our kids positively motivated and out of trouble. They can attract people here and make people want to stay here.

So why the interest in sports today? On yesterday's city council agenda were 3 items dealing with sports and tax dollars. They discussed the proposed new tennis facility, the use of 4b sales tax money for maintenance and operation of city owned sports facilities, and support for the Stampede arena football team. Too much of the debate ended up being about dollars. That's a very important factor, and getting bang for your buck needs to be a high priority, but there are other factors that need to be considered.

Tuesday, September 13, 2005

Bond Rating

A constant refrain in the debate on the local prison project is about the county's liability. The proponents keep telling us "Building this prison won't affect the county's bond rating." Hard to believe.

The county will have to do the contract with CCI for the prisoners. If New York, for example, wants to use the Habilitation house, they have to contract with the county and the county then sub contracts the care to CCI. The requirements for contracting with CCI are spelled out in the Local Government code starting at 351.101. This is not very interesting reading until you get to 351.103 paragraph (6) which says

" (6) if the contract includes operation or management of the facility by the private vendor, provide for a plan for the purchase and assumption of operations by the county in the event of the bankruptcy of the private vendor;"

So if the private vendor, CCI in this case, goes bankrupt then the county must have as part of it's contract a plan to purchase and assume operation of the facility.

Lets see. We have a company with a new, untested, plan and no track record running a prison. The company managing the records and prison industry is "not in good standing" with the comptroller. What is the likelyhood for failure?

They expect us to believe that lenders won't look at these risks when rating the county. How can they be so positive that operating this prison will not affect the counties bond rating?