Why Should I Apologize for Serving the Citizens’ Needs & Desires?

Every citizen is going to have to put themselves in the shoes of their LOCAL elected governing bodies. Here’s the deal as I slip into those combat boots:

“Dear Citizen:

I was elected to listen to your needs and to your wants. You come before this governing body asking for things at every council meeting. We evaluate those requests. We know about most of them because we walk and drive the community. We attend luncheons and all kinds of meetings. We talk to you on the phone. We ask you for advice, such as priorities and urgency. We can’t do everything you ask, but we would if we could. We try our best.

We know that you are intelligent and don’t truly think for a minute that there is a free lunch. We’d give services and utilities away for free if that were possible, but no responsible person would ever entertain that foolish notion. None of us are fools. And name one service we provide that was dreamed up only by local elected officials. Just about everything we do is because 1) you asked for it; or 2) because the state or federal government imposed it on us.

Now comes state government that thinks they know you better than we do. But wait. I’m not going down that road. To bash the Lege and the Gov is not constructive. You know what? Let’s just deal with what we are handed. You, the citizens, and we, the council. Don’t make any mistake about it. We’ve been handcuffed by the state without regard to our pledge to serve you.

And here’s a glimpse of the future. It is highly likely that we may have to hold an election every year for you to approve to pay what you have asked for us to provide. Representative government has been partially tossed out the window. That’s okay. We will put your wants and needs into the budget, but you will likely have to give direct approval as a separate step.

That’s the deal now. Let’s be honest. Holding an election each year is not all that expensive in the grand scheme of things. It’s simply a nuisance and will cause fatigue. Gird up! We didn’t ask for this, but it’s the law of the land. And we will follow the law.

We hope that part of the election routine will be coupled so that capital project approval will be married to the cost of operations. That has actually always been implied. You don’t expect us or anyone else to build a fire station, recreation center, ball fields or swimming pools and then expect the staffing, equipment and programming that goes inside to not cost something, right?

Did you know that the Operating & Mainteance costs, at least over time, are about 2-pennies for every 1-penny of the O&M tax rate? If permitted, we will start including this dual-approval on the ballots: “Approval for $____________ in Project X along with the companion O&M Costs that will mostly be paid for out of Ad Valorem Taxes.”

We may even have to go back and re-vote for some past project approvals or at least to explicitly approve the O&M that you implicitly approved into past bond elections.

The weird part of this onerous requirement on us and you is that we may be asking you to vote annually just because your values went up. We fully understand that our property tax revenues are the results of both taxable values and tax rates. Thanks to the new legal constraints, we may be asking for voter approval only because inflation has outpaced our property tax values. It’s complicated. We’re all for disclosure and being fair, but our Truth-In-Taxation laws are gravitating toward IRS-like hoops when all we are trying to do is to pay for the services you requested.

What we do know is that we won’t stop listening to your needs and wants. If you are willing to pay for these things, we will service your requests. It just might have to be in two steps.

We ask for your patience. We wouldn’t wish this imposition on anyone in the business of helping citizens. However, we are confident that you can wear our shoes at two critical times in our future: 1) when you ask for new services or for us to continue existing services that meet the needs of our community; and 2) be there for the companion decision to pay for those services.

No matter who is wearing the shoes, you can’t have one without the other.

Thank you!

Your Local Elected Official”

The Missing Link in Council Prayers

I am absolutely in favor of prayers delivered by local clergy to start off Council meetings. Many if not most are written, and that is okay with me. They are carefully prepared and delivered from the heart of the person speaking. They invoke a spirit of civility and, aways, wisdom and discernment on behalf of the governing bodies.

Many of these prayers create an inspiring moment and a reminder of why councilmembers said they wanted to represent the people with an emphasis on ALL of the citizens. Most council meetings are launched with the framework for pledging not to forget why everyone in the chambers is there. Many of these prayers are confirmed as the purpose of proper governance with an appreciative Amen!

Not just from the elected body but from the citizens in the audience. Translated: We are in agreement with your words and with your spirit of love and the contract embedded in the response to work for the common good.

And that’s it.

Thank you, dear clergy, and don’t let the exit door hit you in the butt! Let the slugfest begin!

Why is there such a disconnect from that moment to the plunge into the political fracas that often follows? How can one feel blessed and re-committed to be civil and constructive one moment and then jump into personal agendas a few minutes later, turning a collective back to the clergical guidance and plea?

A few years ago I decided to compile all of the prayer for one year and to publish them with a concluding statement: All you have to do is to adhere to these words, perhaps the only words in the meeting that are needed to replace any toothless Code of Ethics or Rules of Decorum, to be the best council in the history of your city!

But then I thought about the level of work versus the potential to make a difference. A cop-out, I’m sure. Here’s all I need as a source: https://chaplain.house.gov/archive/index.html. I will close with the first prayer.

My own prayer is that elected bodies, staffs and audiences listen to the prayers – and incorporate the words into every action and exchange of thoughts and opinions. Most local governments will have a few new members as of the elections yesterday. The first meetings are typically the best for the entire term. Warm congratulatory well-wishers in front of families. Genuine words, usually, with a spirit of renewed commitments as sitting members reflect back on that same night for them.

Freeze that moment and scene. Savor it. Study and replay.

But it means nothing, really, if personal agendas and a lack of respect dominate every hour after that first one.

It doesn’t have to be that way. Fortunately, I have seen a few councils that seem to run against the grain. It wows me to see how it can be done and should be done. Disagreement, sure, but without a drop of bitterness. Genuine supportive statements exchanged with ease. It is common for some councils to praise the staff. It would be awesome for councilmembers to praise their peers.

Things like that would happen if only the words of the clergy prayers permeated the chambers and the hearts of everyone there or watching online. How profound! I’m certain that there would be a covenant of decorum that would change the council and every committee and, in fact, the entire community would be changed forever. LFM

First Prayer of the Continental Congress, 1774

The Prayer in the First Congress, A.D. 1774<br />Courtesy of the Rector, Church Wardens and Vestrymen of Christ Church, Philadelphia
The Prayer in the First Congress, A.D. 1774

O Lord our Heavenly Father, high and mighty King of kings, and Lord of lords, who dost from thy throne behold all the dwellers on earth and reignest with power supreme and uncontrolled over all the Kingdoms, Empires and Governments; look down in mercy, we beseech Thee, on these our American States, who have fled to Thee from the rod of the oppressor and thrown themselves on Thy gracious protection, desiring to be henceforth dependent only on Thee. To Thee have they appealed for the righteousness of their cause; to Thee do they now look up for that countenance and support, which Thou alone canst give. Take them, therefore, Heavenly Father, under Thy nurturing care; give them wisdom in Council and valor in the field; defeat the malicious designs of our cruel adversaries; convince them of the unrighteousness of their Cause and if they persist in their sanguinary purposes, of own unerring justice, sounding in their hearts, constrain them to drop the weapons of war from their unnerved hands in the day of battle!

Be Thou present, O God of wisdom, and direct the councils of this honorable assembly; enable them to settle things on the best and surest foundation. That the scene of blood may be speedily closed; that order, harmony and peace may be effectually restored, and truth and justice, religion and piety, prevail and flourish amongst the people. Preserve the health of their bodies and vigor of their minds; shower down on them and the millions they here represent, such temporal blessings as Thou seest expedient for them in this world and crown them with everlasting glory in the world to come. All this we ask in the name and through the merits of Jesus Christ, Thy Son and our Savior.

Amen.

Reverend Jacob Duché
Rector of Christ Church of Philadelphia, Pennsylvania
September 7, 1774, 9 o’clock a.m.

The Looks On Their Faces; The Thoughts in Their Heads; The Jubilation in Their Hearts!

Some would have been certain it might happen. Most probably had no clue. But I imagine the looks on the faces when it was learned that Christ had risen. I imagine my face had I been there.

The doubters, upon learning the news, must have quickly begun making up an explanation that would confirm they were still safe being doubters. Thieves in the night did it. But even the believers must have gone off in their private places to be quiet, to consider in their minds just how massive this event was then and would be in the future. I can see myself being stunned even if I had no doubts. The silence would be both warm and thrilling as I, and they, replayed the scene over and over of this physical rise. After all, He was in that tomb. He was a real person. That was a body.

But the private pause, as special as it would have been, doesn’t compare to the jubilations in their hearts. I imagine it being intoxicating fueled by joy risen to its highest level, higher than anything ever felt before. That revelation would change the look on their faces forever. Often smiling, but most often with a different kind of glow. The kindness that shines in the eyes. That look reflective of looking into the eyes of Christ; The Person of God that was seen and touched. Can you imagine you looking at Him and, most importantly, Him looking into your eyes?

Can you place yourself there? Watching it as much as you could soak in? Feeling the joy coursing through your body with a new energy? Perhaps the part only vaguely realized in that moment is that His joy can be invoked over and over again for all the days of our lives. One might never have an absence of His joy, but we are fortunate to have times of prayer and worship to allow that joy to rise to the highest level to match that special day. It happened! Place yourself there on this Easter morning. LFM

Why Don’t Governments Invest in R&D?

How many governments would risk spending (investing) $5 million a year knowing they might save multiple times that amount in the future?

Few.

And I know that the word “might” is enough to quickly order the thinker to not even go there.

I also know that Research & Development is not totally absent in local government by any means. If the fire department buys a drone for their use and the police department asks for them to let them “play” with it to test a use in law enforcement, that experiment on slack time for both departments is a form of R&D.

But think of the areas in your city where service costs are growing and draining more resources each year – with control only getting tougher in the future. What would the private sector do? They would put money in R&D knowing that the investment now will enable for them to survive in the future. I know it’s not exactly the same in government.

Oh my, why did I just say that? It’s because I’ve been involved in local government for most of my career. To jump up first with a defensive argument of why we are different or why it won’t work here is a revealing statement.

The Think Tank

When just a young pup in my early career at the City of Garland, the City Manager, Charlie Duckworth had a coffee meeting for a handful of employees. He was seeking input on ideas and observations from mid-level employees and young professionals. I suggested the City create a Think Tank. I had just read a book with that title, and it may be about the time I read the book Mega Trends.

Typical of the fast-acting City Manager, he created just that kind of organization. I still have the booklet outlining the “charge” at that time. Also, typical of most cities, the think tank went nowhere fast as the crisis of the day shoved the idea to the back burner to disappear and never be revived.

I’ve often wondered if this idea had stayed on the front burner, and given some resources, would it have produced more than ideas but rather a completely different way of doing things over four decades later? I want to think so, but …

Another Thought

I’ve often wondered how resourceful staffers would be if they really had an incentive (and mostly the time) to take all of their experiences and smarts to blossom in the R&D mode?

“Here’s the deal: I will dedicate three people to create a Public Safety R&D function. I will give them x millions of dollars (depending on your city size) and five years to find ways to improve performance and save multiple times the investment. They would be free to look at all possibilities, including training (staff, public), technology and, get this, to spend as much money on preventive things as on responding to the demand not under their control. Prevention is our only hope. Progress would be reported on a monthly basis. A significant bonus would be made at the end of the R&D experiment for verifiable savings and workable solutions. The expectation is that we can truly reinvent government in ways not even envisioned today.”

Okay, I know I may be dreaming. But I do know that not much changes except for getting more expensive when there is no reason to change in a risk-adverse environment.

I read a story this morning about the Amarillo Police Department having 85 car thefts reported in one month, with 77 of those with keys left in them! I see these kinds of stories, and I think SENSELESS WORKLOAD. I assume that some fashion of R&D goes on to address the time required to deal with the 77, including how to prevent as well as how to recover the cost.

Enough!

I know full well that various forms of R&D are on-going in every organization. To not be ALWAYS looking for ways to do the job better and to save money would be mismanagement.

My main purpose here is to point out how interesting it is that without R&D, many private sector companies would be doomed. And somewhere and somehow, I believe it is imperative that local governments increase their investment in R&D to be effective in a future where resources are going to be under greater pressure. Necessity, they say, is the mother of invention. We are staring at that mandate.

Lastly, I am incapable of thinking about this topic of R&D without recalling my favorite scene in Robot cop. Language warning needed for the easily offended. However, you can watch it with the sound off and still appreciate the message. LFM

 

Who Owns Your Population Data?

That obnoxious screeching sound is coming from my fingernails going down the chalk board to get your attention.

You must understand the value I place on population data. Just about everything in local government current operations and forecasting is driven by population. Employment population is important, too, but residential population takes the front seat.

I also place great value on the data in your CAFRs, Official Statements for debt issuance and the multitude of expert studies and master plans that lead to decisions for future infrastructure and public facilities.

But here’s my problem. Rarely do I find the same historical numbers in all these documents. The tip off is when I see the same population numbers for multiple years, all rounded to even thousands or hundreds.

Then the difference is forecasted numbers is all over the board, the one I am scratching.

I realize this is a difficult issue and that there are dozens of federal, state and local agencies producing forecasts. And they vary so greatly that the red flag is glaring. I also know that there are pop estimates as of a calendar year, a fiscal year, and the federal numbers are often as of July except for the census as of April. Good grief!

Don’t bring me another problem, Lewis, unless you have a solution!

I do.

Recommendation

  • First, appoint someone in the City to be the official keeper of both historical and future population estimates. Probably the City Planner or the Public Works Department.
  • Reconcile all of your official documents with population and employment history to show the same numbers – and change them!
  • Have your Pop Keeper to be the only official source for future forecasts. Who can be more accurate than the City staffers keeping track of building permit data, utility connections and occupancy rates? Who else can track and see the future coming than those dealing with annexations, zoning, platting,  land use, densities and the remainder of the pipeline?
  • Have your staff delve into forecasting methodologies from your COG and all federal and state agencies. But don’t have them spend much time there. Instead, send your official history and forecasts to them, along with your methodology and implore them to use your numbers.
  • Have an annual review of pop forecasts with a presentation to your govering body AND have them adopt your forecasts.
  • State in your RFPs, Engineering and Consulting agreements that only your official forecasts should be used.
  • Change the organizational vocabulary such that you speak of revenues and expenses as well as workload measures on a per capita basis with the same zeal as a manufacturer talks of those items on a per unit or gallon basis. Dollars may go up. Big deal. That means little in light of the dollars per capita that might even be going down.

In summary, treat the population forecasts as sacred and have every internal and external player use your numbers for consistency and accuracy. Own the data! LFM

 

What is the House Value Needed to “Breakeven” in Your City?

Dear Lewis:

My mayor wants to know the value of a single-family residential home necessary to “breakeven,” meaning for residential to pay its own way?

Dear Colleague:

Thank you for asking me my least favorite question. However, it is an important question, and I will try to answer. But be forewarned, I’m going to give you my shortest answer or at least one you can work through on a cafe napkin. There is a reason.

This is a tough one. The answer has to be understood in the context of mix. If you had nothing but property taxes and nothing but residential, then the answer would be easier. It would be exactly the average value of a single family home available from your appraisal district. I know I can’t satisfy you with that answer that fits into a non-existent world. Yet it is instructive to frame your response starting with a pure single family residential community. Undertanding this one point makes the remainder of the explanation easier to digest.

Yet when the mix of all General Fund revenues is considered, and the tax base internal mix is considered, then the portion paid by the residential class forms the basis for saying the average home value is paying their share – and higher than average value is paying more than their share of their pie with the opposite also being true.

That sounds like circular thinking, but there you have it.

Try Harder, Lewis!

A better way of looking at the cost question is to ignore revenues for a minute and look only at the expenditure side initially.

If you are spending $36 million in the General Fund budget, and you have a population of 50,000, then the services equate to $720 per capita. If you have 3 people per household, then you need $2,160 per household. You can conclude the need for an AVERAGE house value of $540,000 ($2,160 / $0.40 O&M Rate * 100) to carry the costs before other revenues help lower the property tax requirement.

If you have a revenue base that yields 40% from other sources, then you only need an average house value of $324,000 ($540,000 * 60%), net of exemptions.

So, what is your average home value on the tax rolls?

It is $200,000, you say. Hmm! That’s a respectable amount. Let’s dig deeper to understand $540,000 on one end of the spectrum and $200,000 on the other end.

I expected your average home value to be considerably less since we’ve left out a million things, most notably the non-residential tax base. And here’s the deal. Some cities have little and some have much.

Here’s the way I would answer the question with necessary generalities included:

“If City of Fiscal Bliss had only property taxes (and then only a residential tax base) to cover the cost of general government services, it would require an average house value of about $540,000 to cover costs or else a very sizable tax rate increase applied to our average house value of $200,000 currently. Fortunately, we do have a respectable commercial tax that lowers the burden on the homeowner. We also have sales taxes, franchise taxes and some user fees to help lower the property tax burden. Therefore, we conclude that our average house value times our General Fund tax rate of $0.40 per $100 or $800 is our net breakeven cost even though property taxes alone would not cover the true service cost of $2,160 per home.”

Oh my! You aren’t going to like my answer, are you?

As I said, it’s complicated. The clue that this was not an easy question was when the  Mayor said average. That was the signal that the Mayor’s field of view was going to be too narrow. Here is the trap. You want to explain, but the Mayor wants the time, not how a watch is made. So, blurt out $540,000 and then ask if you can explain. I’m pretty sure you will have the Mayor’s attention with the obligatory pregnant pause following your incredulous number.

If you have an average home value of $200,000 in your community, then that should mean you are striving to add house values much greater than the average. It is a fact that the true cost is $2,160 per home, and it is also true that it would take a $540,000 at an O&M Rate of $0.40 per $100 to generate the true cost of service.

But thank goodness you have other revenue sources. Your citizens pay a sizeable amount cost recovery in the form of sales taxes and franchise taxes. You also have direct fees for some services. Otherwise, your average SF value would have to be $540,000 or else your tax rate on an average of $200,000 would have to be $1.08! ($2,160 / $200,000).

Did I just blow your ears back?

But We Paid a High-Priced Consultant for Another Answer

A more elaborate analysis would be necessary to offer much more help here. And while the calculations could get more sophisticated, and the wording much more verbose, I’m not sure the accuracy would be better or the conditional wording more understandable.

Does this help?

Lewis

Understanding The Cost of An Employee

I would like nothing more than to see all employees, municipal and otherwise, paid in accordance with their value to the community as well as to the organization.

However, that would mean many if not most would be paid well above six-figures. Multiple times for many. That’s not just fire and police. That would include teachers. It would also include that water department worker who comes out at 2 am to fix a water main break when it’s 35 degrees outside with the wind blowing 25+ mph. But that’s just me dreaming and being in deep appreciation for those who watch over and take care of my needs. I was raised in a blue-collar home where it was believed and often said how grateful we should be for having a good, steady job.

There is also another view I take. From the finance viewpoint, those levels of pay would probably not be possible. Ever. Actually, that’s not my real hang up. I am guessing that most people reading this blog have never had to make a payroll out of their own pocket. I have. That’s a completely different world when payroll time comes around at an unbelievably quick pace irrespective of the money you’ve made since the past pay date.

Another point I can’t resist making is that if I am going to get things done through other people, I need them to be there. I’ve seen projects take months that should have been done in weeks. The reason is that it might take the expertise or decision-making skills of 4-5 people meeting together. That’s hard to do with vacations (up to 4-5 weeks!) and holidays and other leave. I have thought many times that if we can do without an employee being at work 9-10 weeks a year, we might be able to do without them for 52 weeks. I’m dead serious.

Let’s look at some of the arithmetic.

Fair warning! If you think I’m exaggerating, you are invited to run these numbers for your own employees. I hope you do.

We tend to think of the base salary numbers as the cost of positions. However, depending on your circumstances and offerings, the table below shows how a $50,000 employee may actually cost you and taxpayers $77,689. That’s a 55.38% premium! Worse, most of the salary related costs are not visible to the employee. That’s your fault. Many cities prepare a statement of full costs to hand employees annually. Employees need to know and acknowledge they are aware of the money that is paid out of city bank accounts just for them.

Numerator

Now that we’ve reality-sized the Numerator, let’s look at the Denominator. Local governments are particularly prone to grant more time-off benefits. It doesn’t show up in the budget even though it should in the spirit of full disclosure. Again, let’s pay a $50,000 employee a total of $77,689 and then tell them their work is not all that critical so they can have more leave and paid to not show up. Sounds a little crazy to me.

Most employees are paid for 52 weeks a year and 8 hours per day or 2,080 hours a year. Yet if we were to deduct for 3 weeks of vacation, 2 weeks of sick leave, 2 weeks worth of holidays and then add another 56 hours for everything else (training, TML, start-up and shut-down time, leaving early the eve of a holiday, etc), we can see how this could add up to about 380 hours off, leaving only 1,700 hours of presumed productivity. I generally use 1,800 hours as a benchmark. What is your hours worked by employee?

How can we preach efficiency and effectiveness and rah-rah about productivity with those kind of numbers? Hold off on your answers. I know them all, and some are legitimate and some aren’t.

The reality is that you could easily have a $50k employee that is costing the equivalent of $45.70 per hour.

Denominator

One More Day

I know, you want to break out singing the wonderful song from Les Miserables. Sorry, I can’t let you do that right now. Dang! Now it’s stuck in my head.

In order to dig a little deeper into the impact of giving employees just one more day off, I’ll pitch out my favorite illustration. Let’s say things are tight, and pay raises are flat. We’ve all been there. We offer employees their birthday off or a National Starbucks day off to stave off a palace revolt. Sounds good.

However, again, if we really give a flip about productivity, let’s paint the reality using the City of Dallas just to create a little drama. Even for Dallas, to instantly plop almost 58 new employees on the scene might cause a few tremors in the foundation of City Hall. Yet, that is exactly the productivity loss by the one-day gift. Do the math on your city. It’s about 0.44 employee per 100 you have now.

OneMoreDay

Those 24×7 Year-Round Jobs

Lastly, let’s look at the impact of coverage for 24x7x365 positions usually found in public safety and a few other areas. In general, given holidays and vacations, it takes almost 5 positions to fill a single position 24x7x365.

Councils need to know these numbers. This is why the cost of a fire station isn’t the big deal. It’s what it costs to staff and equip the functions inside. A similar issue is where it takes a crew of 2-3+ to work on a sewer line. You don’t add 1 person only at a time.

24x7x365

Closing Thoughts

These are just the facts. If you are fretting over any of my individual comments or calculations, just chill. Dwell on the direction and thrust of this blog. I’m just wanting to increase the sensitivity to decisions that are costly and that are easy to grant and impossible to take back. It’s a genuine taxpayer inquiry, and you need to acknowledge that you understand the impact of these decisions, many of which aren’t actually discussed aloud in the public forum.

Employees are very, very expensive. The private sector knows this so well that they can’t move to robotics fast enough. If I can spend $77k x 4-5 worker to compare year-round productivity, and then perhaps look at a life span of a machine being 7 years (just playing with numbers), then I could spend $millions and save tens of $millions if the job could be automated.

But the most costly of municipal jobs aren’t conducive to robotics, right?

Hmmm! I’ll bet those were the very words from private sector workers a decade ago.

Here is my guess. If city management had to make payroll out of their own personal pockets, especially with a 2.5% cap on revenue producing opportunities, and maybe even a share of the cost-saving possibilities, we would see spectacular ideas implemented in a matter of a few years. LFM