An article I wrote in early March of 1999, while running against the incumbent Zan Ransburg for a seat on the Peoria County Board, reads as follows: “There will be more requests for tax money than we feel ready to spend. Elected officials must carefully examine these requests, especially when that money is used to support private enterprise or public enterprise that is in competition with existing business. Tax dollars should be spent on a strong infrastructure or “core” so businesses will want to join our community and we will grow naturally. We believe that taxes must be reasonable and tax dollars are to be spent for the benefit of all. Elected officials should be careful in handing out “loans” to grow and improve our community. This is no simple task but the criteria should be relatively simple. “Loans” must be based on how well the “borrower” presents the package, are its financial projections reasonable, does it have broad community support, is it for the common good, can we afford it, does it have a proven track record and is it financially stable”.
The city, and sometimes the county have given financial support to many private and public projects since 1999, many of them that did not meet the above criteria. Let’s see how your money they spent is doing. Let’s start with the most controversial project the city was involved in; the Riverplex. It’s short approximately 2200 full year memberships projected by the Park Board and the Benfield Group from St. Louis, both of these market studies were used to determine the feasibility of this recreational and fitness facility. (JS article 6/99). These projections were what the PPD used as their profit and loss projections and the community need for this facility. These studies showed the RiverPlex as losing $152,639 with only 3000 members and a profit of $521,381 for 5000 members by the 4th year. Bonnie Noble, executive director of the PPD, is quoted in this article as saying “recruiting 5,000 members or less than one third of the target market, is a fairly safe bet”.
An article in the JS dated 7/01/02 says that the facility was already above its capacity of 7500 members but needed about 600 more paying customers to break even. On 5/1/03 in an article in the JS, the PPD is quoted as saying the number of paying members had dropped to 3,789 plus 1,724 non paying scholarships.
The contract signed by the St. Francis Medical Center, Tim Cassidy, President of the PPD and the State of Illinois, states “memberships”, meaning contracts, not members. One contract could cover any number of members using the facility but paying only one contract charge. I know one family of nine that use this facility but are all on one contract. According to PPD sources, the current number of actual paying contracts, many of which are less than a year, range from 2200 to 2800. This is far below the premise of 5,000 or more on which this tax payer supported facility was built.
Figures taken from PPD documents show payments of $3,270,946.00 in principal and interest are being met by the sale of new bonds sold in 2022, 2003 and 2004 with $782,000.00 projected to be sold in January of 2005. These figures only include the Riverplex and the PPD is expected to approve the sale of more bonds for next year, expected to total over $3 million.
On 3/21/99, Park President Tim Cassidy said that “if the growth of this community continues at only a fraction of what it has in the past five years, most, if not all, of the bonded indebtedness will be paid thru RecPlex revenues.” Fact - not one thin dime of revenue has been generated yet and losses are on schedule to escalate when the 2004 year end figures are released in June of 2005. The cost of a contract is scheduled to rise in 2005 but these possible additional revenues are too late to help 2004 figures. So far, RiverPlex deficits of $3,270,946.00 plus another $466,890.00 in operating costs have been put in new bonds not including any that might be put in to cover 2004 operational deficits. (RecPlex was the original name, changed to the RiverPlex after a storm of bad publicity over the building of this facility.) In the years 2002 and 2003 , $466,890.00 of RiverPlex operating costs were put in new bonds making the exactly traceable RiverPlex losses thru year 2003 at $4000.00 + a day. The PPD takes funds from other park sources of revenue to reimburse the RiverPlex for the free scholarships and covers other RiverPlex costs from other sources so the estimated loss per day since inception is in the $5,000.00 -$6,000.00 a day range. This includes the fitness partner’s loss of $577,000.00 loss in year 2003 but does not include the projected $600,000.00 fitness partner’s loss for 2004.
Oh yes, what was your investment in this project other than rising property taxes: $4,700,000.00 of your tax dollars, compliments of the City of Peoria!! Plus loss of all the tax revenue from privately owned recreation and fitness centers who are being undercut in pricing by the PPD!! And approximately 40% of the users of the RiverPlex, come from outside the PPD tax district paying no taxes to support the RiverPlex!!
My next “blog” will detail more places where your tax dollars went without producing the projected return. Brace yourself, there are many!!
I leave this site with this old Burma Shave sign that once dotted our roadways “Don’t Loss Your Head To Gain A Minute; You Need Your Head Your Brains Are In It.”