It's Easy to See How City Hall Spends $3 Billion a Year. Just Watch What Happens Today.

Construction cranes rise all over the skyline, traffic jams rush hour, so many apartment/condo projects crowd the city’s older neighborhoods that you can hardly see the neighborhoods. With this sheer volume of economic activity that we can see in this city with our bare eyes, how does City Hall still manage to come up short financially?

Why hasn’t the city been able to keep up the streets, the alleys, the water mains, the basic infrastructure in the older parts of town? Why is the city facing such a truly terrible dilemma with the police and fire pension fund? Isn’t that like a mortgage payment the city must make every year – a contract the city is supposed to know about? Why can’t Dallas City Hall meet its contractual obligations? Today the council will vote to adopt a $3 billion budget. With a B. How can there be that much money sluicing through City Hall in any given year, and City Hall still can’t make its basic nut? 

Never mind that, just answer this: Where does the money go? 

For answers, we have to do what I call a Look-at-Uncle-Bob audit.

Uncle Bob is never going to show you his books. There is reason to believe Uncle Bob may not even have any books. But Uncle Bob needs yet another loan from you. If you ask Uncle Bob where the last loan went, he’s just going to start crying again, and you can’t stand that because Uncle Bob is a grown man.

So just look at Uncle Bob. He’s broke, supposedly, but he’s driving a Porsche. To tell you his sad story he asked that you meet him for lunch at Al Biernat’s. You don’t even eat at Al Biernat’s yourself because it’s too expensive. But Bob thinks Al Biernat’s is his front porch.

That’s where the last loan went. That’s where the next one’s going. This is easy. It’s a Look-at-Uncle-Bob audit.

So today when the Dallas city council meets to adopt its 2016-2017 budget, I want you to do a Look-at-Uncle-Bob audit on City Hall. Item Number One: the AT&T Performing Arts Center needs a $15 million gift from the city, because backers have failed to raise the money needed to pay off $151 million in construction bonds.

ATTPAC sits on 10 acres in the city’s arts district at the north end of downtown and includes the Margot and Bill Winspear Opera House, Dee and Charles Wyly Theatre, Annette Strauss Square and Elaine D. and Charles A. Sammons Park, as well as Lexus Red and Silver underground parking areas. Architects include Joshua Prince-Ramus, Norman Foster, Spencer de Grey.

OK. What was that about $15 million?

ATTPAC’s private backers – the ones whose idea it was to hire all those architects to build all those opera houses – sort of got in trouble with their bank. Couldn’t pay the note, don’t you know.

They say the bank has agreed to “write down” the $151 million note by $45 million, meaning the bank must figure they’ll be lucky to collect 70 cents on the dollar from these doofuses. So that puts the note at $106 million.

ATTPAC says it had $56 million in “cash reserves.” I don’t really get how that money could be called a cash reserve when they owed almost three times that much. I’d call it more Uncle Bob’s under-the-mattress money. But let’s move on.
ATTPAC gave the bank the $56 million from under its mattress, bringing the remaining debt down to $50 million. ATTPAC says it’s going to raise $35 million of that, and it needs City Hall to kick in the other $15 million. That will take care of the whole debt, ATTPAC says, and the bank will be totally happy.

What a splendid deal, right? The city only has to contribute $15 million to pay off a $151 million debt. OK, wait. Here is why I think this sounds like something Uncle Bob might tell you over lunch at Al Biernat’s:

It’s not the city’s debt. Any of it. It’s the wealthy arts people’s debt. They built all that stuff. They hired all those architects. In fact this might be the point in the lunch when you lean forward across the table and say, “No, Bob, that is not a splendid deal for me at all, because it’s not my effing debt.”

Now, look, sometimes I use this term, “City Hall,” way too loosely, as if every single person on the city council is an Uncle Bob. And nothing could be further from the truth. We have several sharp honest people on the council who know how to do a Look-at-Uncle-Bob audit when they need to.

Yesterday at a meeting of the city council’s committee on arts, culture and libraries, Council Member Scott Griggs, who is a lawyer, made some great points about the ATTPAC bailout request. With the whole ATTPAC team seated before him, Griggs said he wanted them to provide city lawyers with all of underlying paperwork on ATTPAC’s agreement with the bank, so that the city’s lawyers could analyze the deal. Apparently Griggs had been making that same request for a month or more.

Oh, man, I might have missed that point myself. Uncle Bob has promised me that if I just agree to front him X amount of cash, that will totally take care of the whole unfortunate repossession thing with the Porsche. So, because I’m not a lawyer, it might not have occurred to me to ask Bob if he had that from the bank in writing. And may I see the writing?

Of course, at that point Bob would shove back from the table at Al Biernat’s, lift his chin haughtily and say, “Do you not trust me?”

The proper answer, sometimes hard to deliver, is, “No, Bob, not at all. I have no reason to trust you.

“You let your Porsche payments get so far behind they’re going to send out Bruno’s Repo Service to snatch it. Why would I trust you? In fact, Bob, why did you buy an f-word f-word f-word Porsche?”

Like Bob, the private parties who have taken responsibility for running the city’s performing arts center have allowed themselves to get deep into repo territory. An unmet obligation of $151 million is one big repo if it ever comes to that. That size repo would make The New York Times and, in the process, make Dallas look globally stupid.

All of the arts district facilities sit on city-owned land. The city, in effect, is the landlord. So if the landlord finds out his tenant is $151 million in the hole on buildings sitting on the landlord’s land, then the landlord has a right to question deeply the tenant’s business practices.

But ATTPAC, like Uncle Bob, doesn’t see it that way. Their position is that Griggs himself can read the documents in the presence of an ATTPAC monitor, but he cannot have copies and he can’t deliver the actual paperwork to city lawyers. But they want $15 million.

And then there’s this: Griggs extracted from them the fact that the $45 million they had said the bank was giving them as a write-down is sort of not actually totally completely written down paper-wise. As in a written agreement. But they are very sure they will get that much from the bank if and after they do everything else right, like getting the $15 million from the city and raising $35 million for themselves and so on. It’s kind of an aspirational $45 million, more like a prize than a guaranteed amount.

If this were lunch with Bob, I think this might be the point where we grab a fistful of Bob’s shirt and threaten to dunk him face-first into Al Biernat’s signature warm goat cheese salad.

But, no. There will be no goat-cheese dunking for ATTPAC. You watch what happens today. Griggs said as much at yesterday’s committee meeting. He told them he knew that they knew that they already had the votes they needed on the full council to get every penny they are asking for in the $3 billion budget that the council will adopt today.

In fact, I won’t be at all surprised if a couple of council members speak up today to apologize to ATTPAC for the outrageous insolence and bad manners to which they were subjected in the previous day’s committee meeting. They will get every penny they want. They will show not one page of paperwork to anyone. And a majority of the council will say suck-up things to them.

Now multiply that behavior by some factor to include Fair Park, the Trinity River Project and God knows how many fat seven-figure tax give-backs to every made-man real estate developer in town, and you’ve got your Look-at-Uncle-Bob audit.

If they can give $15 million away that easily, they can give away a lot more. It adds up. And remember: Griggs is the bad guy for asking. Bob sure thinks he is anyway.

If you want to know where the money goes, it’s not the numbers that will tell you. Believe me, they’ve got so many sets of books down there they could start a library. You don’t need the numbers. Just look at Uncle Bob. All the numbers you need are in his suit.