This blog is a copy of an email I sent today to our County Administrator and Board Chairman, Tom O'Neill, and three dozen other individuals. I have made some small corrections or additions.
Please read all as some of this information is unknown to the voters.
Early this year you issued a single sheet titled "Museum Project Cost/Funding Summary", dated 12/31/09 showing $13,318,791 "Funds actually received or spent" and "Expenditures through 12/31/09" of $11,516,757 leaving "Funds Pledged or on Hand" of $1,801,791.
Nearly 12 million spent as of 7 months ago.
Since Lakeview Museums Fiscal year ended 6/30/10, I last week asked you again for an update of their financial condition in print. You have indicated you are working on getting it. What is the delay?
The board is going to vote in two days to bond out $41 to the museum from the Sales Tax Referendum passed last year.
More facts need to be made public. In a letter I received from Michael Bryant dated December 11, 2008, before the referendum passed, contained these words "57% private funding (for the museum) of which nearly 90% is in hand". I would interpret that to mean only 10% more private funding would be needed to fund the entire, at that time, $136,000,000 project. The letter said "public funding was to be $59 million". The overall project now has projected costs of $145-147 million. So many statements have been made about the funding of the museum and parking garage funding that it is difficult to know the future risk to the taxpayer.
Millions of dollars in pledges were made to the museum. Pledges are not "cash in hand" as Lakeview's Financial Statements show $556,000 in 2008 and 432,000 as 'uncollectible'. No figures on uncollectible pledges are available as of Fiscal year 2010 ended on June 30, 2010.
The original resolution "supporting the concept of the PRM" passed by the County Board on 12/13/07, was for $24 million. Now that amount has risen to $41+ million. Also, a report from our former Financial Officer, Erik Bush, on 09/08, stated that the Endowment would have to "contribute $11 1/2 million in 'stable' budget situation and $22 1/4 million in a 'reduced' revenue scenario". An amended report was received on January 22, 2009 from Mr. Bush, after further information was given him by Lakeview, stated the endowment needed to be $8,000,000, producing approximately $320,000 per year over the 20 year sales tax term. Mr. Bush said that "a common benchmark for investment is 10%". The proposed Endowment does not meet this benchmark.
These figures are all based on projections. Projections have not been met on any major development on the Riverfront in recent history.
The full board was told by PRM Board Chairman Brad McMillan that "public involvement in other museums is not unusual" and the public share should be about 33%. Actually, today the public share for the museum project is more than 70% depending on whether the city is still going to lease or sell the $10 million valued land for $1.
The board needs to see a draft of the financial condition of the museum at the end of June 30 similar to the one we received dated 12/31/09. As a former businessman, I know of no lender who would wait for 5 weeks to get a draft of this very important current financial report. Nor should the County Board especially before an extremely important vote on Thursday.
Also, we are raising the $34.7 million cap pledged to the museum from the "Facilities" referendum fund to $41 million for the museum building alone The museum was to offset other costs. This extra revenue would help finance the badly underfunded Endowment Fund according to this statement made by Lakeview on Oct, 22, 2009, " If Peoria County supplies the additional $5.3 million, an equivalent amount of funding can be redirected to enhance the Endowment or fund unfunded priorities.......".
(Doug Stewart, a bank president and CEO Board member was quoted in the JS on 12/04/05 that the Endowment should be $14 million). We appear to be settling for much less creating more risk if the project does not live up to projections. Not to be overlooked is projected operating costs to be in the $4.1-3 million range with costs projected to be around $8 million a year in 2032.
No Endowment should be funded by taxpayer dollars. Raising the museum tax collected from $34+ million to $41+ million would appear to bridge this gap as last week the Endowment fund stood at around $3.6 million. Isn't this similar to the City of Peoria garbage fee which is really a tax on the public? To fund what was promised to be a private Endowment?
We have not yet reached an agreement with the City. The only way the facts are gong to come out on this underfunded and now publicly ($70 million+) financed museum project are for all the committee meetings be open (and advertised) for questions from the concerned citizenry.
If this museum is to succeed, facts for all who voted for or against the Facilities Referendum, should be easily available. It appears that some leadership has forgotten that this referendum passed by about 400 votes out of 30,000 cast, hardly a mandate, with the supporters spending from between $600,00 upwards to the non-supporters spending less than $3,000. These "no" voters need to become believers and visitors if this still underfunded project is to succeed..
Promises and pledges are just that, not hard money in hand. There is often a vast gap between "visions" and facts. Our board chair has been told to "prepare a tight agenda and stick to it". As of now there are still a lot of unanswered questions about the stability of either project, mainly the PRM.(BelWood bonds for $51 million are also on the agenda). Chairman O'Neill should not hold to a "tight agenda" this Thursday evening with so many questions unanswered.
Once low interest facilities are built, they remain to be funded for 50-60 years or more. Any studied information of this museum, indicate that both the funding of the museum, underground parking and future revenues and operating costs pertaining strictly to the museum and parking garage, are all projections; these projections to be funded largely by a "skeptical" taxpayer as proven by the referendum vote and all the delays on contracts and funding.
Skeptical? One of several surveys presented by County Administration showed the answer under Policy questions was "Peoria Riverfront Museum: 65% somewhat oppose or strongly oppose a sales tax increase" Note also that the Peoria Public Park District has failed to raise the money for the $5 million dollar parking lot and entrance to enhance the new zoo. Also check how many dollars in new business has been brought into this community by the new $27 million zoo. The museum, two Bradley Professors project, will bring in $14 million new dollars to local businesses every year??
At a County Board Meeting July 9, 2009, you made it clear that "ground will not be broken, even for the parking deck, until there is $8 million dollars in PRIVATE funds to cover the gap. If PRIVATE funds in CASH have been raised in the past year, please "show me the money'.
Is not this situation similar to what helped get us in the financial mess we are in in this country; that the buyers thought they had the funds and credit to buy housings and buildings?
This project became flawed shortly after its inception. One misunderstanding was the museum committee believing the County was contributing $6 million. The figure is actually $600,000 paid over 6 years. This was an error made by the County. This money is supposedly being held in a separate County Account. As our paid County liaison Mark Johnson said "it is a mess". Before the "messes" started surfacing, I supported the $24 million and the concept as per my vote on record. For the past two years, I have not.
Despite a tremendous amount of energy and money already spent, approximately $12 million, it still appears to be unfunded and flawed.
This project should again be put on hold at least until the City decides if they now wish to charge the museum project for the land. And the Endowment is fulfilled with PRIVATE funds and the pledges outstanding are audited, a request I made a year ago..