Author: citybaseblog

Dear Class Bully … I Need To Tell You Something

.Reading time 6 minutes.

It’s summer, and another miserable year has passed watching you bully people in and out of school. It’s not so much me any longer since I ignored you in elementary school and finally faced up to you in middle school. You mostly left me alone except for laughing at me occasionally and letting me know I am not in your circle of friends. But I watch you bully others. That bothers me just as much. Maybe even more. I need to tell you something.

You need to know how it feels to be bullied. Every single day is dreaded. I can’t say I’m ever happy knowing that you will eventually come along to say or do something cruel. The bullied feel lonely and many times unsafe. We see how your cruelty continues to be more severe, uglier each year. Sometimes at night in bed, I can’t sleep, replaying in my mind something you said or did that day. I often feel ill.

I consider you to be dangerous.

I would never harm you, but I must tell you that at times I wish you harm. If only you could feel for one moment how you make other people feel. Threatened. Singled out. Distracted. Lousy. Worthless. Angry that another person can have that kind of influence.

I would never harm myself. But I must tell you that I think about it. Sometimes I want to do something drastic to show you how much you have hurt me. But then I realize how many people love me deeply and how I would hurt them. That won’t ever happen. Yet there are days you have put me in that zone of despair. And I resent it.

Most of all, I wonder what made you this way? Deep down I question whether you are a happy person? Do you act this way to cover up something? Do your parents ever ask you if you are being bullied or if you are a bully to others? My parents do. They read the news. They worry about me when I am sad or simply just quiet. They know when something is wrong. If I were a bully like you, they would be right in the middle of finding out what is going on with me.

They also speak up quickly if I say anything offensive about another person. They have taught me to respect others. They encourage me to look for the person in the room who needs a friend and to be that friend. They have taught me to look for the good in others. And yes, I even see the good in you. You are good looking, you are funny and you are smart. But there is much more involved in building healthy relationships, my parents say.

I want you to know that I don’t need you as a friend or to be in your circle of friends. I have my own. It seems strange to me that your friends are much like you, although you are clearly the leader. What part of you enjoys that growing spiteful teasing of others in front of your friends? That seems sick to me. I wish you would seek some counseling. I wish your friends would stop supporting your behavior.

While I don’t need you as a friend, I wish we could be friendly. I have only a few deep friendships, and I am perfectly fine with those few, but I want to be friends with everyone. It’s not a popular thing. It’s a human thing. I don’t want to have any regrets in life, especially on the simple things like how to treat another person.

I want you to be thinking about something over the summer. The day school starts, and every day after that, I am going to call you out for bullying. I will be reporting you to the School Resource Officer or the Principal. I would normally try talking to you personally, but my attempts in the past have only led to more harassment from you. I will stand up to you, because I think you need a mirror held up to you.

I don’t want anybody you bully to seek revenge. I will risk outing your behavior and report you to the authorities before something happens, and then I regret not doing something. And before you, your friends and your family are overwhelmed with a deeper regret for being responsible.

Yet, I will make an equal effort just to be friendly to you and to persuade you to do the same with me and with everyone you see.

It will be your choice.

Your Classmate.

The Next Improvement Step in McKinney Governance

.Reading time 3 minutes.

I have high expectations for McKinney with the new City Council members now seated. However, the improvement steps won’t be nearly complete until there are a few new faces on some of the Boards & Commissions. And a few recommitments. I trust that some changes are about to be made.

This is not a new gripe for me. I have blogged about some members of the McKinney Economic Development Board and the Board of Adjustment in the past. What we don’t need is anybody on McKinney Boards & Commissions that melt into sheep-boards like they have at McKinney ISD. We don’t need people looking after their friends or are self-serving.

My suggestions to consider before appointing/re-appointing the current slate of Boards & Commissions:

  • Are you truly independent and willing to serve the entirety of McKinney with considerations for the citizens today and in the future?
  • Can you commit to doing your homework before meetings AND faithfully attending meetings?
  • Are you wanting to serve on this board solely as a stepping stone to run for City Council in the future?
  • Is there anybody in McKinney for whom you fear consequences if they don’t like your comments, recommendations or vote?
  • Do you have the ability to say NO when your conscious tells you the deal in front of you is not wise or in the best interest for McKinney?
  • Do you understand the Council-Manager form of government?
  • Do you understand the Open Meetings & Open Records Laws and are willing to abide AND to call out your colleagues when you know a violation is taking place?
  • Do you have a strong personal code of conduct irrespective of any written Code that might include many or all of the items many Codes as in this example?
  • Related, is your nature to raise the bar or let others around you to set your standards?
  • Do you have the ability to ask good questions that are necessary to evaluate an issue and be equipped to make an informed decision?

A list of the current Boards & Commissions can be found here.

If you are teachable and diligent as a student of government, and are of good character and can give an affirmative response to the questions above, please apply. You are greatly needed, and you can be an integral part of improving McKinney to be the most balanced community that can be found. I’m just a citizen blogger with 44 years of experience in municipal government. But I will do anything within my power to make you successful. LFM

I Got My Answer On The McKinney MUDs

.Reading time 6 minutes.

The question was posed in a previous blog.  Who is monitoring McKinney Utility Districts? Exactly one year later I got my answer. I knew the City Council and Staff weren’t asking the right questions when they entered into a consent agreement in 2012. That decison set a bond issuance cap of well over $200 million on a relatively small parcel of land in Trinity Falls that put them into the big-league of indebtness. Last Monday night Trinity Falls came back to the Council asking for the debt ceiling to be raised to $318 million!

Bad decision. Bad timing. Bad presentation.

Four new Council members are now asking questions. Good questions. The right questions. Common sense questions. If you have $262 million authorized and you’ve only issued $38 million, what’s the rush? And, by the way, let’s better understand who allowed this beast and why?

If you want to see my nominiation for the Presentations Gone Bad Award, see the video of last Monday night’s meeting at http://mckinney.granicus.com/MediaPlayer.php?view_id=5&clip_id=3930 at the 1:39:13 mark. First, note the rate of speed in which the speaker is talking. It’s close to those disclosures at the end of ads on TV or radio.

It might also be a tip-off to the validity of this request.

Note first that he says the MUD is not in the City limits of McKinney. That’s a true statement, but stick it in your back pocket for a minute. We will come back to this little jewel.

Note that there is mention of 5,000 rooftops, but the speaker can’t answer a basic question about the amount of expected commerical property. And the 4-5 suits sitting behind me failed to come to his rescue. But I can attest they were squirming.

Then wait for the slow-motion train wreck when the Mayor starts reading an excerpt from a letter written by a homeowner inside the MUD.

Oh, it gets worse. The Council starts playing tag team with simple questions. Questions like where does the MUD board post notices of their meetings? Well, they are posted at the Collin County Courthouse. Yep, you heard correctly. In case you don’t know, you don’t go by the Courthouse on your way to get a loaf of bread. It’s a destination trip, but not in the vacation sense.

Where are the meeting held? At the MUD engineers’ offices in Frisco. FRISCO??? Strangely, there is no place to have a meeting in Trinity Falls. They don’t have a community center, and they don’t have the money to build one. Wrong answer to a Council being asked to bump a debt ceiling from a gigantic $262 million to an interglactical $318 million.

Then comes the biggest goof of the night. The Trinity Falls representative was asked about why notices were not posted online? The response was that the MUD did not have a Web site. And then he turned into a lawyer and started giving reasons why a Web site invoked all kinds of burdens. However, assurances were given that a Web site would be available sometime in the future.

May we take a break here and ask that you go to http://www.trinityfalls.com? Dang if there isn’t a Web site! It appears to be fairly mature. None of those “under construction” icons.

Whoa! Look at this on the front page: “Trinity Falls is a 1,700-acre master planned community in McKinney, Texas.“

Now reach back in your hip pocket where you saved that earlier comment from the speaker, the correct one.

Trinity Falls is not in the City limits, but it is being marketed as if it is. No wonder people living there are confused.

As a side note, look at their monthly newsletters. I checked a few, and I don’t see any notices about Board meetings, agendas or minutes. I did find a huge splash encouraging residents to check out the shopping in Plano. How interesting. Could you please come begging to catapult a debt ceiling from the McKinney City Council and then promote shopping in another City!

Do you see anything wrong with this picture?

What I do see is that the New Council is not going to be the Rubber Stampers of old. Trinity Falls was told the item would be continued at the regular Council meeting on Tuesday, the next night. I watched that meeting and the item was pulled from the agenda by Trinity Falls. “Indefinitely.”

As is Wooden-Stake Indefinitely? We shall see.

And I am guessing that whether Trinity Falls comes back or not has no bearing on this Council’s desire to dig deeply into MUDs. The inquiry isn’t over. It’s just getting started.

What is of great importance is that Trinity Falls residents don’t have a vote in McKinney. But they do have a voice now. LFM

La’Shandion Shemwell: A Story of Redemption

.Reading time 3 minutes.

How could a person with a questionable history end up being elected to the McKinney City Council? His opponents were relentless in pointing out his undeniable flaws, all in the past, both in the initial election and the run-off election. He is in District 1, mostly the older part of McKinney. I understand he lives in public housing. I could not vote since I don’t live in that district. The first time I saw a picture of him, I wondered if he had many supporters. I heard nothing bad about Mr. Shemwell. In fact, what I did hear was encouraging. He is a barber by trade and a man on a mission to lift up the standards for youths in his passionate side-ministry. So I just watched. And he won.

My 14-year-old granddaughter was with me at the standing-room-only Council meeting Monday night when three new members were sworn in. The new mayor had been sworn in at a previous meeting since he did not have a run-off situation. It was a lively night, full of celebration and gushing with compliments for those going off the Council and those being seated. Lindsey got to see first-hand how hope and goodness and vision starts out with every expectation that things will improve in the future.

There were many highlights, but La’Shadion Shemwell
Shemwellstole the show. Gratitude to God and family came from the lips of most of the newbies. But you simply must watch this clip of the meeting at the 40 minute 48-second mark. I’m expecting that it will make your day as it did those of us serving as witnesses. I think it is a sign of things to come for McKinney governance and leadership.

There’s a new sheriff and posse in town, and the changes will be noticed near and far. LFM

You need Internet Explorer to view the clip:

http://mckinney.granicus.com/MediaPlayer.php?view_id=5&clip_id=3930

I am a

00:40:49 mountain, I am an eagle, I am a lion,

00:40:56 down in the jungle. I am a marching

00:40:57 band, I am the peo

00:40:57 band, I am the people, I am a helping

00:41:03 hand, I am a hero. If anybody asks you

00:41:09 who I am, stand up tall, look me in the

00:41:15 face and say, I’m that

00:41:15 face and say, I’m that start up in the

00:41:17 sky, I’m that mountain peak up high, I

00:41:32 made it. I’m the world’s greatest. I’m a

00:41:33 little bit of hope. When my back is

00:41:34 against the ropes, I made it, I’m the

00:41:35 world’s greatest. I am district 1, thank

00:41:38 you

McKinney Underground Government Suffers a Setback, and a New Future Opens

.Reading time 7 minutes.

The voters have slammed the business-as-usual, McKinney Underground Government in a big way by making sure the Mayor Pro-Tem doesn’t get to stay at the table. He’s out. I should say he has been outed. Also, three “winkers” and “I can’t vote against my friends” Council members are termed out even though old developer friends rushed to get some things approved just before the election. Good riddance!

Even though there are three runoffs, those with the most votes should be successful. The remaining three Pogue-worshippers will be in a minority. Oopsy!

McKinney made a turn yesterday – a major shift that will bring needed change to the way business is conducted in local government here.

It is clear, crystal clear, that having the McKinney Fire and Police Unions support does not bring assurances you will win office. In fact, I sense that it backfired and will continue to be a negative instead of a positive. A smart candidate in the future will flee from that kind of support, which will make the elections two years from now for the three incumbents that much more interesting. If I were a member of the Fire & Police Unions, I’d seek new leadership and new rules about political pandering.

But there is hope. They have two years of experience under their belt and could make a difference if political intrigue can be replaced with sound decision making. One of the three was overheard telling the other two that I was going to be “taken down” after one of my blogs. Let me say this: I stand ready to heap genuine praise for any and all of the seven doing their job and only their job without favoritism or malice. Try me.

As a companion statement, I will not hesitate to blast any of the new four if they become part of the McKinney Underground. My support of them ends the moment they abandon their independence for their friends. My loyalty is cemented by what they do and only by that yardstick. My training and my orientation are to match words with action.

But this is just the beginning. McKinney voters need to keep up the momentum. After the three runoff leaders get seated, it will be time to push for major changes in the City Charter – the People’s Word. We the citizens need to make sure it becomes a violation of our Charter for political candidates to use the City’s logo for political purposes as is already prohibited in some cities.

If possible, we need to make it illegal to use any city employee group for political influence. As I said recently, it is flat wrong to have city employees pushing to pick their boss three levels up. It stinks, and the voters apparently found the pungent smell too much to reward and unworthy of their vote. Please, people, think deeply about how that has been allowed to happen in McKinney. The only people who have told me there is no Underground are members of the dang Underground!

The future City Council needs to move immediately to get rid of the City Attorney. He is part of the Underground, controlling way too much and being much more involved in City business than just offering legal advice. What are the sound reasons for rotating the City’s independent auditor after several years? It applies to the City Attorney, too. The “he has so much historical knowledge” argument is bogus. If that is so, then we have allowed McKinney to get shackled to a job protection scheme that is simply not a good business practice.

The City Council needs to confront and take action on any aspect of the way McKinney violates the Council-Manager form of government. If it’s one of them (and there have been many), call out the infraction. If it is a staff member undermining the City Manager (and there have been many), then resist the practices of the past. If it is the old establishment of developers and realtors or anybody new on the scene, call out the foul.

McKinney is so desensitized to bad practices that many good people have no clue they are in violation of sound governance because they are just doing what they have seen everybody else do. I think that ended yesterday.

In fact, make it known inside and outside the walls of McKinney that this city assures a level playing field to everyone in both tangible and intangible ways. Ask people outside of McKinney what our political reputation is. Imagine what that answer could be with fair dealings.

I think we are in for two years of new professionalism that will change McKinney forever, with an acceleration two years from now. Professionalism breeds more professionalism. That’s the missing message to bring the quintessence of said professionalism to McKinney in the way of the best businesses. McKinney must get out of the desperation mode. If we could reach build-out in, say ten years, just exactly why would we want to be in that kind of rush?

Then, citizens, we must work on the McKinney ISD, where the sheep-board is anesthetized to the point of servitude to the Superintendent: the opposite end of the governance spectrum. The McKinney City Council can set the example. LFM

Collin County Tax Base is Robust … And Will Put Pressure on Officials to Lower Tax Rates

.Reading time 5 minutes.

We are blessed in Collin County. The momentum (momo) is enormous, and there are no signs of slowing down. In fact, it is just the opposite. Our momo is gaining momo!

The market value of my property went up 16.90%. Wow! My investment is paying off. My assessed value is lower due to my Homestead and Over 65 Exemption. Still, that’s quite a rise.

The pressure will be on for local government officials to lower the tax rate in most cases. But just how much? It depends. Each government will have to compute an apples-to-apples comparison in accordance with the State’s Truth-In-Tax laws before tax rates are considered beyond July 25, when the Certified Tax Roll is finalized. A key metric is the Effective Rate. The calculation can get complicated, but it basically boils down to this: what is the tax rate that equals last year’s Operations & Maintenance Tax Revenues + this year’s Debt Service obligations?

Oh, by the way, last year’s O&M Tax Rate can be adjusted to compensate for services needed to cover new growth in our community plus anything we annexed. That’s fair. You don’t add $billions in new subdivisions without needing more staff to patrol and serve same.

That basically leaves us with the Revaluations to scrutinized. I made an attempt to separate that critical number from an official document released yesterday by the Collin County Appraisal District that can be found at http://www.collincad.org/downloads/viewcategory/55-estimated-taxable-values.

Can the O&M Tax Rate be dropped by that Revaluation Percentage, which is 5.93% for McKinney and 5.11% for the County as a whole? Not exactly. There are two things not covered in the T-n-T calculation. One is inflation. Personnel costs and just about everything costs more due to inflation. So, there is a reasonable expectation that a portion of the increased tax valuations should cover property service cost increases due to inflation. Inflation means I am buying the same things for a higher price.

So, what should that inflation factor be? The official number is about 2.00%. My expectation is that local government inflation is more due to a fairly large amount of commodity costs, such as fuel, electricity, road materials and more. Let’s use 2.50%, just for illustration purposes.

That would leave about 3.43% in the O&M Component of the Tax Rate for McKinney. Should we expect that level of tax reduction?

Well, maybe, but there is one more thing, and it is not tiny. There are new things needed and approved all the time. Cameras and better police vests are examples. Not cheap. The list is long, and many if not most are new services and service level increases requested by the citizens and taxpayers themselves.

So we should just suck it up and expect all of the 3.43% to be absorbed by local governments? Not at all. In fact, we are isolating just this one component of budget balancing to better understand it. Below the CCAD table, you can find my diagram of all of the other ways local governments have to balance a budget BEFORE they get to raising the taxes or utility rates.

I started calling this approach Skinny Budgeting way before President Trump started using the term. And virtually every avenue for budget balancing has been part of my sermonettes since the early 1970s. The elements of this approach are exhaustive as you drill down within each selection. When I prioritize these approaches, the very last one is to defer necessary expenditures like infrastructure maintenance. The next to the last one is to raise taxes. The very first one is performance improvement, which should be an everyday exercise and not one saved to balance a budget in case of a crunch.

More on Skinny Budget in a later blog. My point for bringing it up as part of this blog is to keep from getting slammed from John & Jill Obvious that tax revenues aren’t the only balancing solution that should be examined.

Also, and this is very important, these CCAD values are preliminary, before they go through the appeal process – a primary obligation of the property owners. LFM

2017EstimateTaxableValues

 

IMG_1701 (002)

McKinney Police & Fire Unions Have No Business Being Involved in Political Influence Peddling

.Reading time 5 minutes.

Introduction.

There is nobody in Texas more supportive of police and fire than I am. For over 44 years I have been involved in lifting them up, praising them across the state and letting them know how important they are to us. My wife and I never miss an opportunity to thank them for protecting us. Our biggest joy is when we offer to buy lunch for a table full of first responders at a restaurant. Our prayers frequently include a specific mention for public safety workers to be protected from harm.

But I have also been the budget director or financial planner to many cities and a couple of counties in Texas. I appreciate all local government workers. My wish is for us to be able to do everything we can to support everyone. While I think of those risking their lives, the municipal family is much broader to me. There is nobody I respect more than the water department workers who are called out at 2 am in the freezing rain to dig a hole to climb down in so they can fix a busted water line in order to service to be restored before I wake up.

Violation of Council-Manager Form of Government.

For the City Council (or candidate) to reach out for direct support and sponsorship by the Police and Fire Unions (or any city government employee group) is just flat wrong. In essence, it is saying my boss is the Chief, and his/her boss is the City Manager and his/her boss is the City Council and their bosses are the Citizens. So, to hell with the legal structure the Citizens adopted in the Charter. Let’s gang up and try to influence the last two echelons of the City’s intentionally selected form of proper governance.

It’s the most basic form political manipulation in McKinney. The common phrase is “count to four.” That means if you can get four votes, you can do or get just about anything you want in McKinney. That is why developers and real estate people are such prominent financial contributors in local races. But the most dastardly maneuvers by that particular group pale in comparison to an employee group trying to pick their boss’s boss two or three levels up.

McKinney Citizens Are Being Duped.

Here is where the Fire & Police Unions laugh all the way to the voting booth. Citizens are under the impression that there is a massive amount of support for a candidate. However, do this math:

  • How many people are in these two departments?
  • How many of the employees of these two departments belong to the Union?
  • How many of those employees actually live in McKinney and are eligible to vote?
  • How many of those voting are doing their own thinking or just following the Union leadership?

Wouldn’t it be funny if having the Police & Fire Union blatant support isn’t really generating that much political favor if the rank and file, not to mention the other city employees, quietly vote the opposite? I don’t know the exact numbers, but I’m guessing there are a small handful of actual employees making it appear has if the entire forces are championing a candidate. Politically brilliant, I suppose, but a charade.

Conclusion.

Citizens, be suspicious of this aspect of McKinney’s Underground Government. It’s real, and the only way it is ever going to change is by new blood. 1-2-3-4.

I will continue to be a cheerleader for all employees in local government. But I will always see a red flag when an employee Union is deliberately trying to manipulate an election! LFM.

Thank you for taking care of us!

.Reading time 7 minutes.

When I’m at a big luncheon or similar situation, I find myself watching the faces and demeanor of the servers. I can’t remember when I started doing this, but it was a long time ago. Perhaps it was after reading William F. Buckley’s An Attitude of Gratitude. It is more likely that it’s part of my DNA since my parents had that nature. I find myself having a need to thank the servers in a genuine tone and then seeking them out afterward to thank them again. What I don’t know is whether I do this for the server or for me. It could easily be me doing the serving. My blue-collar upbringing, then college, and then my wife have shaped my every step. Mentors have opened doors, and a few pushed me through those passageways.

A colleague of mine, Ron Holifield, has been placing a big emphasis on Servant Leadership. My first introduction to that particular topic came years ago from another good friend and colleague, Dan Johnson. In a leadership course, he talked about Robert Greenleaf who coined the term. Greenleaf got his idea after reading a book by Hermann Hesse who authored a book about a journey.

The story was about a group of people on a long pilgrimage to seek a great master. The storyteller is laboring with his baggage on the journey when a small man comes to his aid, picking up some of his bags and carrying the load. At some point near the end of the journey the helper disappears, which irritates the pilgrim. Soon after they all reach the top of the mountain. When they meet the master, the man is surprised to learn that it was the master himself who appeared and carried his burden.

These kinds of stories fascinate me. And motivate me. I’ve got many. About 3 out of 4 times my wife Linda goes grocery shopping, half of her time is spent shopping. The other half is spent seeking out a person who needs help. One of her best friendships today started at Wal-Mart years ago with a simple comment turned into an hour-long conversation. And that was just the beginning.

I don’t know if they still do this, but under Ron Whitehead’s leadership at Addison, the councilmembers and CMO staff used to host a cookout for all city staff. A simple gesture with a profound impact.

So, today comes another story. It started my day with an early lift, like a devotional to ground me and to infuse me with gratitude. I’ll let it speak for itself.

theeagle.com

Texas A&M students serve custodial staff at luncheon to show appreciation
STEVE KUHLMANN steve.kuhlmann@theeagle.com

For nearly 20 years, Roslyn Adams has served the students, faculty and staff of Texas A&M University as a member of the custodial team, but Monday — even if for just a few hours — she and her peers got to take a break and enjoy each other’s company in the Bethancourt Ballroom of the Memorial Student Center.

More than 500 members of the university’s custodial staff, employed by custodial, grounds and maintenance service provider SSC, were honored during the annual Custodian Banquet, which featured a catered lunch, raffle, music and a photo booth.

Adams said the student-organized event is a meaningful gesture from those she and her co-workers serve on a daily basis.

“It just shows that somebody around here appreciates us for what we do,” Adams said. “These students don’t have to do this, but they went out of their way to do it, so it really means a lot.”

Freshman Madeleine Williams, a member of the Student Government Association’s Custodian Banquet committee, said helping to plan the event has been special to her as she has been able to interact with custodians throughout the year.

After nearly seven months of preparation and fundraising, Williams said, it was rewarding to see the custodians enjoying the event.

“It really is just a small way to give back to them for serving us every day,” Williams said. “It’s cool to have this opportunity to make them feel special for a day.”

In addition to helping serve the food, busing the tables and visiting with the staff, the students were also in charge of cleaning up the space once the event was over.

Brandon Placker, who has worked at the university for roughly seven years, said while many of the people he comes into contact with on a daily basis are kind, the nature of their work remains largely thankless. Placker said he is appreciative of the students’ efforts to show their gratitude.

“To know that people actually care, it means a lot,” Placker said.

Sincere Johnson, who has been on the job just over 10 months, said she particularly appreciated the free, on-the-clock lunch.

“They saved us money today [since] we didn’t have to go buy lunch, and it was nice to see all the other people I’ve worked with before,” Johnson said.

Ted Dawson, regional manager for SSC, said with more than 23,000 square feet of facilities, it is a rarity for all of the employees to get together.

“It’s great because a lot of these people have known each other for years but may not work together anymore,” Dawson said. “For them to do this for all 550 of our employees is absolutely amazing. It really shows how much the university cares and thinks about the custodian staff.”

Is McKinney Sandbagging Revenue Estimates?

.Reading time 10 minutes.

McKinney is asking for citizen input for the upcoming budget at tonight’s meeting. Since most citizen comments are limited to only three minutes, I am opting to blog my observations on sales tax revenue assumptions.

I monitor sales tax revenues for every city, county, transit authority and special district in Texas every month. That would be over 1,600 local governments. Due to the beating levied on the oil patch regions in Texas, the total collections have been relative flat for about 18 months. But the total $8 billion annual local government base has been stable and is now growing again.

However, while many regions have suffered, that is not the case for others such as in North Texas. The collections have been robust in the DFW area. Let’s look at McKinney in particular. On a Rolling 12-month (R12) basis, there has been constant growth at an impressive rate since the Great Recession. As of April 2017, the City has collected $48,852,787 in the last 12 months, the highest ever. Just about every month is another record breaker.

The annualized growth rate is 11.34%! The R12% is the most telling and sensitive indicator of growth. It will announce slowing, peaking, bottoming and recovering points way before you can grasp the changes in dollars. The R12% is an incredibly robust metric for McKinney. Double-digit growth is difficult to sustain. But half that amount isn’t.

April 2017’s check was $216,062 higher than April 2016 or 6.57% more.

By the way, you can see the anomalies such as the positive $5 million + Audit Adjustment McKinney received back in 2011. The R12 spiked for exactly 12 months and then returned to its strong growth trend.

But let’s shift our attention to the Sales Tax Per Capita calculation. On a statewide level, Texas local governments are receiving $161.86 per capita on a 1-cent basis. McKinney is collecting $139.32 on that same basis. That can be translated into $3,951,225 below average or twice that amount since McKinney collects the full 2-cents allowed for local governments. But we knew that even before the City spent money to have a “leakage” study done in recent years.

McKinneySalesTaxChart

But let’s put $139.32 per capita into perspective. I prepared the chart below a few months ago and have not updated it. However, the value remains. It is instructive to look at McKinney’s Sales Tax Per Capita when you can see several years of history and adjust the calculations for inflation (CPI).

You can see the fluctuations that come from a mix of population growth and economic peaks and valleys.  You can see clearly where McKinney has been in recent years. This metric was $133.26 at the end of the fiscal year 2016. I had projected that it would rise to at least $137.81 at the end of the current fiscal year and then up to $139.61 at the end of FY 2018, the budget year for which input is being requested. I was intentionally slightly conservative. I used an inflation rate of 1.75% when it is likely to be above 2.00%.

This estimate translates into the following, again, on a 1-cent basis:

  • FY 2016 $23,594,961 Actual without any audit adjustments.
  • FY 2017 $24,917,139 or 5.60% higher than FY 2016.
  • FY 2018 $26,367,347 or 5.81% higher than FY 2017.

So, there’s my input.

PerCapita

In looking at the agenda packet for tonight, I find a presentation that indicates a sales tax growth rate of 2.06%! It does not say whether the growth rate is going to be applied to the 2017 Budget, the 2017 Revised Budget or any other base. That’s important. It appears to be scientific in that it is the composite of the Fed Median GDP Projection; the 10-Year Dallas Fed PCE; the 10-Year Rolling Average; and the Low 5-Year Average.

Hold on a second. I’m not sure any those are logical linkages. Here is what I do know. I have prepared some very sophisticated sales tax modeling algorithms in my career. And no matter the degree of complexity or academic statistical excellence I worked into the model, my last step had to include dividing the numerator by the denominator (residential population and employment) to come up with a Sales Tax Per Capita value.

Questions Abound

On the surface, the concept of making conservative estimates sounds noble and smart. But here is the problem. Actually, there are several problems. If you are too conservative (lowering revenue estimates and raising expenditure assumptions), then what is there to manage?

One can brag about how the spending came in under budget. Big deal. Not to hard to do with enough padding.

One might even brag about how money has been “found” mid-year to come in and save the day for new need, especially a political need. In my career, I have seen how eventually nobody needs to fight for resources during the budget. Just know that the real budget “tightening” will come when the budget is revised mid-year in face of the true income and spending levels. Except “tightening” can turn into new-found money (oh how I hate that phrase).

The net result of being overly conservative, other than the kudos for rescue funding mid-year, is that reserves get boosted. But then that argument gets abused. If you have 60 days of operating reserves, wouldn’t 90 be better? Well, if big is better, then why not build reserves up to 180 days. Where do you stop?

Next, comes the most insincere and most abused argument of them all: “the bond rating agencies want big reserves or else they will drop the bond rating.”

Rage sets in on me. I’ve watched the McKinney finance staff shut down a legitimate question asked by a councilmember by simply invoking the “Bond Rating Agency Threat.” Grounds for dismissal in my book. Especially the Deputy City Manager who directs the financial staff. He knows the game, and recent abuses have been on his watch.

But here’s the deal. The bond rating agencies place a high degree of emphasis on fiscal management, including controls and planning. They will even hang with you if you are in trouble. They mainly want to know a couple of things: 1) do you know you are in trouble; and 2) do you know how to get out of trouble?

Want to know how the bond rating agencies will react to something? Go ask them! They are approachable. Plus you pay them a big fee to be rated.

Here’s something else I know. McKinney is flush with reserves after years of overly conservative budgeting. I won’t be handing out a badge of honor for big reserves when there are legitimate needs for spending – or to cut the tax rate.

And I know this. Overly conservative sales tax budgeting boosts the need for property tax revenues. It works like this. A penny on the tax rate produces about $1,700,000. A one percent change in the sales tax revenue equals about $260,000. Low ball the sales tax revenue by 4% and you need the property tax rate equivalent of $1,400,000 or a TRE of about 6/10 of a penny. ($260,000 x 4) / $1,700,000.

So, do this at the McKinney meeting tonight: ask for the Budget vs Actual for Sales Tax Revenues for the past five years. Ask what the revised FY 2017 sales tax revenue estimate is expected to be now that nearly half the year has gone by. LFM

BTW, if you want to see the first chart for every entity in Texas, you can download my charts I prepare monthly. It’s a big PDF file.

You can view “StatewideCharts201704.pdf” at: https://files.acrobat.com/a/preview/8bd7f399-4e3a-48e0-a717-50b9b92e7125

Distractions

.Reading time 9 minutes.

The reason I went dark from November 11, 2016, until now is that I have been distracted.

Not all distractions are attached to bad reasons. But they are distractions just the same.

Maybe it started with the presidential elections. The person I voted for won the election. I was surprised and ecstatic. I predicted if he won that he would be a train wreck. If so, let ‘er rip! I’m tired of talk, talk, talk. Dumb Republicans had eight years to groom a candidate but let an Independent steal their party. They got what they deserved.

But after I suffered for eight years and never complained publicly, I’ll not spend a second listening to the whiners who want to protest at sufficiently loud levels as if the more noise will rewind history. Rally all you want. I can’t hear you!

I equally despise Republicans and Democrats. And most of all, the Tea Party. But I do have one good thing to say about the TP (and only one), which I will save for a future blog.

For a long time, I have cherished silence. That need is growing. I opted to send my sister-in-law in my place on a family cruise at the last minute in early March. I spent a week in silence, just working. I watched zero on TV, and still have not turned on my office TV. I deactivated my FaceBook account and still have not reactivated. Same thing for LinkedIn. And Twitter. I do get plenty of news alerts that I read since news is one of my primary businesses. Silence is golden to me.

I am distracted by McKinney politics. Well, until I checked out a few months ago. McKinney is run by an underground that key people in the know will not deny. They also won’t do anything about it. In fact, they have winked for so many years that newbies know no difference and aren’t about to mess up the favoritism playpen. That might change with this upcoming election. Hope so. But it’s going to take some major changes on the Council and inside City Hall.

It bothers me that AG Ken Paxton is abusing the legal system to save his hide. I’m sitting in the middle of Collin County, his Mother Ship, and his nature of doing business up here is legendary. He is bad, but his worshippers won’t admit it.

It got distracted by Bruce Springsteen standing up in a foreign country and telling the world he came to them as an embarrassed American. I was okay with his rants and others before the presidential election, but I was ready to puke when he (and others in the entertainment industry) wouldn’t give it up after the election. After listening to him every single day for decades and giving my family instructions to bury me in one of my Springsteen shirts, he is dead to me. He does not exist. But, honestly, I am grieving. You would have to know what his music and performances meant to me to understand.

Perhaps distractions are affecting me differently since I am turning 70 this year. I don’t feel THAT old. My mind says I am much, much younger. Or so it seems. But my preferences are to stay in my cockpit of two computers and ten monitors to work, think, analyze. And maybe even start writing again.

I’ve sworn off going to conferences. The last one I attended included me falling off the back of the stage just before I spoke. The one before that I forgot my conference clothes and came back from Houston before it even started. The one before that I had to return just before the conference started due to my mother’s impending death. I think the message is clear: stay in your cockpit, Lewis!

I have had some health distractions. Nothing serious, yet, but true distractions.

When I said that not all distractions have been bad, I was particularly thinking about a project I am working on with a client under new city management leadership. It is a multi-year contract to provide an entire series of budgeting, long-range planning, utility rate studies and more. I am considering it to be my final exam regarding just about everything I have done in my 44-year career. I am having a blast.

I started part of this approach years ago, but now I have a real application. I am calling it McLain’s All-In, Top-Down, Visual Skinny Budgeting or Skinny Budgeting (I was using the term before Trump picked it up). If I could work “No Stone Left Unturned” into the title, I would do it. More on that subject over the next few months. It is a dream project for an analyst like me.

Related, I have closed my Confidential Sales Tax Reporting & Analysis work to only current clients until 2018 so I can focus on just them as well as my new project. I have a great client base of 15 cities plus DART that includes 13 cities.

In my career, I have done hundreds of workshops, presentations, and analyses for no compensation. Willingly. To serve the entire municipal family is an honor. I am changing that slightly. I won’t be doing any presentations in the future. Too many rude people in the audience checking their phones for messages or talking.

The exception will be a workshop I am going to do in a few months to promote Skinny Budgeting. I won’t be seeking new clients for anything other than fee-based training. I just want to see the approach used in governance and fiscal policy decisions.

On the other hand, I love one-on-one conversation. I am happy to meet with anyone willing to come to McKinney to chat over a cup of coffee. I also will usually respond quickly to an emailed question on just about anything within my knowledge base, which is narrowing. I treasure my pen pals.

My blog will provide a considerable amount of my thoughts and analyses for those who sign up through http://www.citybaseblog.net. I feel called to write, but the time competes with everything else I do.

Otherwise, I plan to take care of my CityBase subscribers, my Confidential Sales Tax Clients and my one Skinny Budgeting client.

I’m not sure about where I might head blogging about McKinney politics. If the governance and culture do not change, McKinney politics will be dead to me. Not worth it. Life is too short. But I am hopeful that some will leave and go crawl in a hole somewhere. And that some staff who are part of the underground will be run off. We’ll see. LFM