Wednesday, March 11, 2009

Caterpillar - More Cuts Friday

Caterpillar cuts 117 more white collar jobs; last day, this Friday. All the while, Cat officials say the non-income producing millions they would spend on the riverfront have nothing to do with firings, layoffs, and local PRODUCTIVE spending. Then have empathy for all of their local suppliers who produce a product. Those businesses have been severely affected. How must some of them feel about Cat having money to donate $55 million to a project in so must demand that the promoters are spending $640,000.00 to try to sell it to the voter?

And why such a hard time over the last 5 years of raising the money?

I understand there are worldwide reasons for downsizing. I do not understand Caterpillar's continued push to build a Visitors Center saying the only reason they would do that is to support another enhancement on the riverfront. Over the past decade we have built a lot of partially or fully taxpayer funded enhancements. How many new businesses did we attract versus the number that closed or moved, some just across the river? I can think quickly of several failures on the riverfront, InPlay, Gateway Building, Damon's, RiverStation, Tilly's, a retail store and other small businesses. Leave a hole? Probably for a while. These are bad economic times. Caterpillar bought 2 plus acres leaving 7 acres for a tax paying entity someday after recovery if Peoria is ever going to attract businesses downtown.

Cat made their pledge for a New Visitors Center in 2002 when prospects for the company and community appeared better and the Museum was to be a Central Illinois Regional Museum with everybody in Central Illinois chipping in money.

That was then and now is now. Now is not the time to "save face".

On 12/08/04, the JS and the JSEB reported that "Cat makes history with museum gift." "$11 million will be contributed from the Caterpillar Foundation toward the regional museum and up to $20 million in matching funds. Specially, Cat will give $7 million outright and the remaining $4 million is contingent on whether others donate to the campaign. Caterpillar has pledged to match contributions of its employees and and retirees, up to $2 million. For companies ?? that have their own matching program, Cat will donate $1 million if those companies raise $2 million.

Caterpillar, Inc. would build a $40 million Visitors Center but only if the regional public riverfront museum was funded. And Cat and it's foundation would help fund the museum and parking garage. The June 30, 2008 Lakeview Museum Financial statement says that Caterpillars $11 million contribution to the new museum is structured to be paid over a 5 year period beginning in 2006. There are four components: a core grant of $7 million; a 1:1 employee/retiree match of $2.5 million; a $1:2 community challenge grant of $1 million; and a 1:5 state/county challenge grant of $500,000.

Subsequent to June 30, 2006, the Caterpillar Foundation increased its original $11 commitment by $2.5 million. This addition is being made available as additional matching funds for pledges from Caterpillar, In. employees and retirees at the same match 1:1 rate."

The museum also has an agreement with the Community Foundation of Central Illinois "to establish a separate nonendowment type of account for the receipt of charitable contributions which will be utilized to pay construction costs and other related expenses for the PRM and to fund an endowment for operations of the RPM".

In January, 2009, Peoria County Board Staff told the Peoria County Board that "the endowment needs to be at a minimum of $6,750,000.00 and to hedge against not meeting revenue collections, it should be over $12,000,000.00

As of 6/30/08 the Foundation held $2 million largely for an endowment. As of March 2009, the Foundation held $1.6 million according to the Lakeview Museum CEO, a shrinkage of approximately $400,000.00

As 6/30/08 the museum had cash and securities of $9,576,548.00 and pledges of $8,310,160.00, a total of $17,886,708.00. As of 3/09, I understand those figures have either stayed stagnant or had shrunk. According to museum officials, outstanding pledges were in the process of being verified. In 2007, pledges noncollectable totaled $556,659.00.

On last Friday, the JS reported that even with the $40 million raised in the new sales taxes if the referendum passes, the museum will still be short $11 million. On 9/3/08, the JS reported "Downtown museum supporters launch final push over the next 7months for $47 million so project can move forward. The CEO Roundtable was expected to raise $8 million of the $12 million needed from the private sector, $3 million from the roundtable member, $2 million from community businesses and $3 million from other community individuals."

Still leaving $4 million short if they succeed and show proof of their success. Promises and pledges mean nothing when people are being fired, wages cut, laid off and over-taxed.

The voter knows little about broken pledges, cash in the bank, $5 million of the funds raised already spent, unrealistic projections and declining attendance nationwide. (At a Forum this week, Wichita, Kansas was mentioned as a success, only if a 60% decline in attendance is a "success".) I'm assured by museum officials that $8 million has been raised over the last 7 months and will be announced shortly.

The voter should know that small, $72 million, taxes add up, and a lot more taxes, business failures, firing, wage cuts and nationwide economic security is happening or on the horizon.

Back to the 117 Caterpillar white collar workers whose jobs will be terminated Friday. Why is all this money going to enhancements when we should be creating jobs in Peoria that produce a saleable product? For an all union construction project, the unions pledging $400,000+. Costs of the proposed museum rose from $67 million a year ago to $78 million (and rising) because of rising "construction" costs according to Mark Johnson, Caterpillar project manager.

For some reason the Caterpillar Visitors Center cost only rose $1 million to $41 million.


Wake up, Peoria AND MAKE YOUR VOICES AND ACTIONS COUNT. Vote no against this project that should be halted by those in charge now. Moody's, one of the top investment rating firms in the country, plans to keep a closer eye on Peoria. Read Paul Gordon's "Moody's keeping tabs on Cat fallout" in Tuesdays JS. Moody's says that Peoria City, Decatur and Aurora, Peoria County and several other taxing bodies including school districts, park districts and airport authority could be most exposed through the recession, a recession that no one knows when it will end.

Don't be so negative, some say. You surely jest. Realism trumps optimism any day.

No comments: