Buxton Process

We are making good progress with Buxton. We contracted with Buxton to identify and find up to 10 new retail contacts. Buxton had developed a map of our major and secondary trade areas and sent a report on our retail demographic characteristics.

When I was doing my background checks with other Kansas clients, one of my colleagues told me his greatest surprise was seeing the makeup of his community was not like he thought it would be. With that information, I expected to see demographics that looked more like the college town that we are. No, the demographics look like my colleague's community.

Buxton uses some unusual terms for their population segments. I had a great time looking at their terms and definitions. One is "Blue Highways." It represents a lower middle class population living in a rural community on highways that are usually connected by blue lines on a map. Boomer men in the group generally like to hunt and fish and the women enjoy sewing and crafts.

One of the surprises to me in our demographics was the largest population cohort was the 35-44 age group followed by the 25-34. The second table below shows the larger to smaller Cohorts. It is a interesting look at the population.

Cohort	Pop	% of Grp	Cum %
0-4	368	5.06%	5.06%
5-9	392	5.39%	10.46%
10-14	463	6.37%	16.83%
15-17	349	4.80%	21.64%
18-20	398	5.48%	27.11%
21-24	460	6.33%	33.44%
25-34	736	10.13%	43.57%
35-44	843	11.60%	55.17%
45-49	524	7.21%	62.39%
50-54	493	6.79%	69.17%
55-59	374	5.15%	74.32%
60-64	333	4.58%	78.90%
65-74	606	8.34%	87.24%
75-84	596	8.20%	95.44%
85+	331	4.56%	100.00%
Cohort	Pop	% of Grp	Cum %
35-44	843	11.60%	11.60%
25-34	736	10.13%	21.73%
65-74	606	8.34%	30.07%
75-84	596	8.20%	38.27%
45-49	524	7.21%	45.49%
50-54	493	6.79%	52.27%
10-14	463	6.37%	58.64%
21-24	460	6.33%	64.97%
18-20	398	5.48%	70.45%
5-9	392	5.39%	75.85%
55-59	374	5.15%	80.99%
0-4	368	5.06%	86.06%
15-17	349	4.80%	90.86%
60-64	333	4.58%	95.44%
85+	331	4.56%	100.00%

 

 

Utility update

Last week I promised to write about the utility rate analysis I am going through. In the weeks before I started work while I was working on the 2008 budget, I spotted a problem that needed attention. Each of the four utility budgets were being balanced against the existing cash balance. The expenses of the four were not covered by the revenues of the four utilities.

Our problem comes from at least two points. The cost of the recourses we resell has risen due to improving the utilities. We have built a new water plant and we have not yet adjusted the rate to recover the additional cost of debt service. We are building a new waste water facility and that debt service will add over $4 million to the mix. The Rural Development Agency is funding our construction project. They have projected that we need to adjust the sewer rate to an average of $35.00 per month per customer. Westar is no longer the contract supplier of our electric energy. They were going to increase our wholesale cost of power and the City chose to join the Kansas Power Pool to help control prices. Even at that, the cost of electricity will be higher than what we have paid in the past.

The other point comes from taking funds from the utility funds to offset costs of the general fund and other property tax generating funds. The “subsidy” accounts for 20% of the four utilities total budgets. It is normal for cities like Hillsboro to have their utility funds cover some costs of general operations. The impact is that property tax levies are held artificially low.

The decisions the Council and I have in front of us will focus on how to keep the cost of utilities low while covering the costs associated with the operations of the utility and the general operations. With a $3.8 million annual budget, the dollars are there but fixing the imbalance will mean reprioritizing what we do in local government.

The total transfer to general operations is $781,500 from the four utilities. A portion of those funds would be transferred to general operations under normal conditions. We have come to rely on those transfers a little more than we should. That is, in itself, an understatement too.

So, what do we do? Our City Council is committed to rebalance the contributions from utilities but, as with all problems, the fix is not easy. It is not a problem that can or will be fixed within the course of this budget. It will be more likely the next one or two budgets. As we go through the strategic planning process, we will begin to see how the fix will occur.

Progress on two fronts

There are two projects that the City Council and I are working on. The first is developing a new strategic plan. The second is reviewing the budget around our utility rates. Since this post is longer than I expected, I will write about the utility rate issue later this week.

Twice last week, we met in work session to talk about the future of Hillsboro. Monday, I gave a presentation on what the strategic planning process is all about. In a nut shell, I described two approaches that communities use. There is a “citizen based” process where all the ideas come from community members involved in the process. This process usually takes about one year to complete. The other is a Council/Staff process where specific questions are directed to Council and staff about the direction they see Hillsboro going. A community can usually get through this process in a month to six weeks.

I generally prefer the second model because it involves me directly in the discussion with the two groups that have to implement the results of the process. I see the end results as something the City Council can then evaluate my performance by. As a new resident of Hillsboro, one cannot expect that I would have a complete handle on the needs of the community. That is the key to having both staff and Council in the same room together at the same time. I can draw on the knowledge, experience and aspirations of that key group to lay a foundation for the work we are about to do.

Our second work session began the hard work of identifying how we think about Hillsboro. I am not going to write (yet) about the results of the initial meeting except to say there is excellent raw material to work with. Here are the questions I posed to Council and staff:

Exercise 1
· How do you see Hillsboro in 10 years? Responses here tell me about the hopes and dreams we have for our town. It also compares reality with what we would like to see
· Describe the positive elements of this change
· Describe the negative elements of this change
· How would you influence things so the negative elements do not happen?

Exercise 2 (a SWOT exercise)
· Strengths – what is the community doing right
· Weaknesses – what should the community stop doing?
· Opportunities – what should the community start doing
· Threats – What is the most important problem or project that needs to be addressed?

Exercise 3
· Identify 5 significant EXTERNAL factors that will affect local government in the next two to five years.
· Identify 5 significant INTERNAL factors that will affect local government in the next two to five years.
· What trends might have a major impact on the local government in the next five years:
o Demographics
o Economic
o Social
o Technological
o Environments
o Political
o Regulatory or legislative

We spent 2 ½ hours identifying our responses to these questions. Our next step is to start analyzing the answers we came up with and develop an action plan around the response.

Boomtown Bolg

I have been reading the Boomtown USA Blog written by Jack Schultz for a number of years.

In the January 7th post, he describes the top 10 trends he sees for 2008. http://boomtownusa.blogspot.com/ is the URL. While you are there, sign up to get his blog feed every day. It will come via email like this does. He does a great job keeping us all up to date on development issues and what folks are doing around the country to grow jobs and opportunities in their communities.

I prepare a Blog posting from time to time from other Blog's I read. when I read and think something is important from a Blog, I will write about it and send you to the site too.

This is a Planning Week

The City of Hillsboro has a big week planned starting Tuesday. The Council will have a work session Tuesday noon and Wednesday afternoon (4:00 PM) to talk about strategic planning. Thursday, the Planning Commission will be holding a Public Hearing on adopting a new Comprehensive Plan, Subdivision Ordinance and Zoning Ordinance. All of these will seriously affect what will be developing in Hillsboro in the next 5-10 years.

Through my teaching with the League of Kansas Municipalities, I developed a short seminar on strategic planning. I will be giving this presentation to the Council and the staff Tuesday and Wednesday. I do Introduction to a full blown strategic planning process and show a version of “strategic planning lite.” What the Council and the staff will participate in on Wednesday night will be the “lite” version.

The session will focus on four questions. I’ll outline those after the work session.

Ice Storm

We fared well during the recent two storms. I want to brag about the Electric Crew. The worked all night Tuesday, got a little sleep Wednesday morning and went back at it. They did a fantastic job.

One thing I particularly want to point out is the triage approach to their work. The office staff took phone calls from residents about where lines were down and services were lost. Gary Andrews took the calls from the office and checked them out to prioritize the work of the guys on the crew. It worked great. Mike, Jason, Todd, Randy, and Joe made a number of folks happy throughout the night.

We had two outages that cut service to Hillsboro. Tuesday morning, a 15 year old patch failed under the weight of the ice. Tuesday night, the Westar substation lost power due to a burning switch. The high amount of electric load going through the switch with no where to go as power lines in the country were falling contributed to the fire. Westar had to do a temporary patch to restore power about 1:30 AM. Again, as the power was restored, the crew drove each primary line to see there were no fires as a result of turning on the individual feeds. It was very important work that was unnoticed by us.

Key to the survival of our system was the tree trimming we did earlier this fall. We caught a bunch of grief for our tree trimming but the work paid off. We did not lose power as a result of trees. Now, there were a number of residents that were not so lucky. We had over 50 houses that we had to reconnect after repairs were made due to tree limbs falling on the secondary services.

I hope folks take note of the fact that due to the tree trimming, we all had power. Again, very forward thinking and action kept us in power.

Thanks Guys!

The Bee Movie

At the Kiwanis meeting today, Hillsboro business owner Brent Barkman presented his company’s involvement in the Bee Movie.

Barkman is the Chairman of the board of Golden Heritage Foods. They process honey for a number of markets. He noted that he and others in his company had been officers in the national honey trade group. They knew that the Bee Movie was being produced and made a pitch to Dream Works to be part of the promotion process for the movie. In January 2007, they, along with other honey marketers, went to Hollywood to meet with movie developers to brainstorm how the honey market might be promoted with the release of the movie.

After getting a private meeting with Dream Works people, they were able to show a prototype of the Barry Bee honey bottle. The result was a contract to use the Barry Bee likeness on the bottle. They are now distributing the 2 ounce honey bottle nation-wide.

Next up for the Golden Heritage folks is getting an E-store up that will provide Barry Bee honey products. It is scheduled to be ready just before Christmas at www.ghfllc.com.

Completed Move

My move from Concordia to Hillsboro is now complete. The house finally sold and the household goods are moved. I actually stayed in the same town for more than 10 days last week. My biggest problem was to find an auto shop to do the work that Charlie and Steve did for me. I think I found one!

I am going to use this Blog space to write about Hillsboro now. If you want to hear about what we are doing here, I invite you to stay registered. If, however, you want off the list send an email to lpaine@cityofhillsboro.net and let me know you want off the registered user list and I will remove your name. What I need is your email address. Some of the addresses do not let me connect a name with an address so just sending your name won't help me remove your address. It is a manual process.

I am finishing month 4 here. It has been quite pleasant compared to the Concordia environment. Imagine that!

About two months ago, we approved a plat for a new business park along highway 56 on the north end of town. The subdivision has 11 lots in 21 acres. We have two businesses interested in the property already.

The second business contact was interesting. The company called the Mayor, a realtor, and said we are interested in coming to your town, do you have some "dirt." Evidently that is developer slang for developable property. That was the week we were approving the Plat.

Being a curious sort, she asked "how did you find us?" The company used a "site selector" company called Buxton. Buxton uses a large number of data sourses to match businesses with communities. They work with 4,500 companies in the US. Additionally, they work with over 300 communities to help them find retailers for those communities. Hillsboro will become a client shortly.

Hillsboro has a number of projects tied to the sales tax revenue so development of retail markets is important. We have a very nice "cement pond" that is being paid for by sales tax money. Developing solid property tax and sales tax generating business, therefore, is very important.

Over the next 90 days, we expect to review 50 to 200 companies that match the buying patterns of Hillsboro folks to see who we can recruit here. It is an interesting concept that I will write about as we go thorough the process.

One important decision that the City Council considering is to make the marketing data available to the existing retail community so they can be more effective in their retail niche.

In doing a background check on the Buxton folks, I talked to a City Manager I know who said "with this information, I know exactly how many refrigerators will be sold in this market. Now I can talk with the retailers in town to prepare for that market demand." It is specific information like that that makes the service valuable to the local folks.

Once we identify the target business we want to go after, Buxton will help introduce us to the company. Our economic development person - who, by the way, is a private sector person like Kirk Lowell - will join me in making the pitch to the selected companies. (Note to the woodshop: now, don't spill your coffee; the private sector model works and it works here too!)

It has been fun sharing this information with you. I hope to get a group of Hillsboro folks signed up now. I need to get a new picture too for the masthead. Later!

Thank's Concordia

I have completed my career in Concordia. I will be getting up at a very early hour to get to Hillsboro by 8 AM. Some of you know, I am not a morning person. Taking the two drive with my iPOD humming a few podcasts will get me in the mood for starting the day.

I had a lot of comment from the "think about" program I did last week with Kirk. For those who missed it, we talked about the differences between Mayor/Council and Commission/Manager forms of government.

Over the weekend, Don Osenbaugh, from the League, and I taught our annual Municipal Leadership Academy class in WaKenney and Junction City. As usual, we had a number of elected officials from both forms. I picked up more reasons for the conclusion I came to at the close of last weeks show.

I have turned off the email response for the time being. Since I don't have access to the old address, I won't see you comments. You can post them anyway. I will read them later.

I will still remember all the fine folks here. You have been great!

LP

Air Quality Permit.

There is a meeting scheduled for Everton Energy's Air Quality Permit Monday July 2, 2007. The meeting will be in the City Hall Community Room at 7 PM.

It would be a good thing for people to attend the meeting to see how Everton is meeting these requirements.

Remember the comments that were going around when the ethanol project was announced? There were people saying that "yellow sticky stuff" would be coming from the plant.

See you at the meeting.

Getting Ready

Life is getting a little hectic around the house as we get ready to move to Hillsboro, KS. Every time we leave the house, it has to be spotless "because someone might show the house!" Living in "perfect" is trying.

Getting some time in at the Hillsboro City Hall has been fun. Learning new names and putting them with faces adds to the fun. I have been to two Council meetings and they are different than here. One of my greatest disappointments is that someone sent the Mayor of Hillsboro an unsigned thank you card with a little note enclosed. I shared a comment with the Mayor before so her getting the note was not surprising. I was embarrassed for Concordia.

I am looking forward to the coming week. We will see the fruits of our labor in the economic development world. It is interesting to see the interest in our community by business and industry from around the country.

I am reminded about the conversation I had with one citizen when I arrived. He said "Concordia is just dying. We need to let her die in peace." It led me to develop the "signs of life" list showing the number of new business ventures Concordia was experiencing. It will be interesting to see how the impact of another big project will bring out "our dead and dying" mentality. Building our community both economically and socially is an important part of what our community leaders are trying to accomplish.

By the way, I heard a great rumor last week. It seems that the City Commission was reported to have received $100,000 each for voting yes on the ethanol project. We really need someone to step forward with credible information. I would carry this to the KBI personally to have it investigated. As with any rumor, this one is so ludicrous, it is absurd

Ethanol takes next steps

The news at city hall these days has been ethanol and will be ethanol for some time to come.

Water has been the key part of our discussions. We are seeing evidence that the water is available and is able to be permitted. Our focus has been on learning what other communities have learned the hard way and going to school on their experiences.

What is great at this point is application of the lessons learned.
· Everton is looking for and finding water resources for the plant using their resources.
· Everton will be constructing the wells, well houses, and piping system that connects it to the City of Concordia.
· Everton wants the effluent water from the waste water treatment plant for use in their cooling towers. They will clean this water with sand filters to be built on the WWTP grounds.
· The entire infrastructure will be given to the City of Concordia before the plant is constructed.
· At the end of the day, we will charge them for the privilege of providing water to them.

This ends up being a great benefit for the City. Without Everton’s intent to build a plant, the City could not secure the water rights Everton is acquiring because we have a surplus in the allocation of what we have versus what we use. Everton can get access to water because it will become part of the municipal water system.

Due to the private financing process they are using, Everton is not able to keep these assets on their books and asked the City to finance this infrastructure. Our first reaction to this was guarded. What looked like a good deal suddenly looked shaky. The result of our concerns produced the following results:

· During construction of all the infrastructure elements, Everton will provide a $6 million letter of credit to ensure construction is complete. If something happens to Everton during this construction period, we call the bank holding the letter of credit and the project is paid. Period. Again, if something happens to Everton during this construction period, we call the bank holding the letter of credit and the project is paid. There is no risk there.
· Once the construction is complete and the water system is operating. The cost of construction will be converted to a Special Assessment District Bond where Everton is the sole member of the district. That bond picture will have two years of bond payment reserves held so that if Everton goes away, we have two years of bond payments available while Everton’s financiers work out how to pay those debts.

While the first one is very little risk, the second financing method has some risk. While we don’t expect or wish any failure on Everton’s part, we do have to consider the possibility of a business failure.

A key element in the risk planning is knowing that the special assessment district bonds are a first position debt if a failure happens. Our $6 million comes before the $200 million. For the folks that own the $200 million debt, having the City of Concordia in the first position will be troublesome. They will want Concordia’s lien removed thus paying off that bond.

This week at the City Commission meeting, the Commission and Everton will be discussing the development agreement. No action will occur at that meeting. Adoption consideration is scheduled for the June 6, 2007 meeting.

A new Blog to watch

Early in March, our daughter Brynn went on a missions trip sponsored by the university she attends in Ohio - Cedarville University. She went with about 30 other students to Puebla, Mexico to work a camp for elementary and junior high kids.

On one of the last days the group was there, one of the young men was injured and broke the C2 vertebrae. Long story short is that it was a severe and life threatening injury.

Because I am a Christian and I do not believe in coincidences, I believe God put a number of people on that site that day with equipment that normally wouldn't be there. The people who helped keep him alive were incredible. One fellow "bagged" the young man for 1.5 hours. That meant he pumped air into and out of his lungs for that time. You can read about those situations in the Blog.

Listening (actually reading them) to the stories makes one really appreciate the level of medical care we are able to provide. What they had to do to get him back to the USA was incredible.

Which leads me to tell you about the new Blog my family reads. www.checkinondan.blogspot.com

The young man's name is Dan Knudsen. He is a junior at Cedarville University. Today he is paralyzed from his ears down and getting all sorts of therapy to get him back breathing on his own.

I encourage you to read his family's Blog about what is going on. Take time to read the comments, which are many, and get the perspective of how precious life really is. Start at the beginning and get current. Get a box of Kleenex, you will need it. When you are finished you will see life as it really is and how positive you can be.

This is a challenge I hope you will take. It has reminded me of situations Susan and I have been through and the sustaining power Christ gives to us each day. LP

Sales Tax Continues

I wrote earlier about the attention I pay to Sale Tax receipts the city receives. It is a barometer for me to see how business is doing.

Today the March distribution was forwarded to us. We will see it in the bank probably Thursday. The nice thing to report is that March revenue out paced the year to date mount from 2006.

The total received last year was $366,645. Received so far is $386,049. This amount puts us 5% more than 2006. I don't have a feel for the sales tax growth in other rural markets beyond a comment I heard from Secretary of Revenue Joan Wagmon in January 07 when she said that most of Kansas has flat or less sales tax growth.

Remember that next Tuesday is the election. As they say in Chicago "vote early, vote often."

Sale Tax Report

The news continues to be good on the sales tax front. Concordia's receipts for February (January transactions) was $139,948.66. We received $130,776.14 in January 2006. The collections year to date are $17,526.51 more in 2007 than in 2006.

Yes, business is good in Concordia! Thank you for supporting our local businesses.

Also, Tuesday is primary election day for the City Commission and the Community College. Remember to vote.

Elections

Tuesday is the primary election for both the City Commission (two seats) and Cloud County Community College (three seats).

The City primary election will rduce the candidates from six to four. The Community College primary will reduce their field down to six.

Voting is an important right that we as American's are not regarding as important any more. As a student of the political process, I was impressed by Iraqi voters braving personal danger to vote.

How would you justify not voting to an Iraqi voter?

Character Counts!

Mayor Joe Strecker gave this to me last week. I comes from the River Valley District Extension Newsletter. The newsletter says that this is the first of 6 articles. I hope to get the others and post them here too.

Have you heard of the Six Pillars of Character? If not, let's introduce those to you. This is going to be the first article in a series covering the Six Pillars of Character. Please feel free to use this information in your daily lives and in your communities as we all strive to be better citizens.
The Six Pillars of Character are: Trustworthiness, Respect, Responsibility, Fairness, Caring, and Citizenship. This month we are looking at the broad overview of these Characteristics, in the months to follow there will be specific information about each pillar as well as activities to use at home, at work, at meetings, and other places.
Trustworthiness Be honest
· Don't deceive, cheat or steal
· Be reliable
Respect
· Treat others with respect; follow the Golden Rule Use good manners, not bad language
· Be considerate of the feelings of others
Responsibility
· Do what you are supposed to do Always do your best
· Think before you act - consider the consequences
Fairness
· Play by the rules
· Be open-minded; listen to others Don't take advantage of others
Caring
· Be kind
· Express gratitude Forgive others
Citizenship
· Do your share to make your school and community better
· Get involved in community affairs
· Obey laws and rules
(Amanda Lott, District 4-H and Youth Development)

City Hall Day at the Legislature

Today, Commissioners Joe Jindra and Darrel Hosie and I ventured up to Topeka for the League of Kansas Municipalities’ City Hall Day at the Legislature event. It usually requires that we leave when it is dark. (I don’t like getting up that early.) I enjoyed the drive because it reminded me of winter in the San Joaquin Valley where I grew up. From Clay Center to past Manhattan fog covered the road. It was also an opportunity to get quality time with two members of the Commission.

The event brings elected and appointed officials to Topeka to hear about what the legislature is doing from the House and Senate leadership and to get updates from LKM staff. Today we learned that there is a new constitutional amendment proposed that will freeze property tax values for those over 65 years of age.

We also heard about the SB 323 approved last year. It is the Eminent Domain bill. Legislation is being proposed to address the use of eminent domain in the areas where blight is involved. A new definition of blight is being proposed – although we did not hear what it was.

The resumption of Local Ad Valorem Tax Reduction revenue (LAVTR) was discussed. LAVTR was created in 1965 to help communities lower their ad valorem tax (property tax). During the Graves administration, the State of Kansas decided that they needed those funds to balance the State budget forcing local entities to come up with local funds to off set the loss of LAVTR. The impact to Concordia was in the hundreds of thousands of dollars. I was working in Baldwin City at the time and the loss of those funds was $200-$300 thousand. That was a considerable hit on the ability to fund the budget. If that happened today, it would be 8.7 Mills that would be made up by both new tax revenue and reductions in spending.

We heard about the changes in FCC Cable Rules that are affecting municipalities across the nation. In budget comments the past several years, I have pointed out that franchise fees for Cable, Telephone, Gas, and Electric are at risk from the US Congress. We are projecting $533,000 in 2007 revenue that could disappear by congressional action. Franchise fees are our third highest source behind Sales Tax ($1.5 million) and Property Tax ($619,000).

SM 20 is a bill requiring all units of government to be a member of Kansas One Call. One Call is a private organization that coordinates location of underground utilities so contractors can carefully excavate without disturbing a buried water, sewer, gas, electric, or cable line. The problem with this bill is that it is mandatory. The City is a member of One Call but there are 222 communities with populations less than 500 that cannot afford to participate. Many times, we have one employee spend the entire day marking locations for contractors. This bill would also put the oversight of local utilities under the jurisdiction of the KCC. From our point of view, oversight is better left in the hands of the City Commission – at the local level.

One of the most interesting speakers was House Utilities Chairman Carl Holmes (R-125). He spoke of the many things that were happening in the Utility area. One key point I picked up on was the development of transmission lines so wind energy projects can be developed. Capacity on transmission lines is one of the problems of expanding renewable wind energy in Kansas. This is something I need to watch.

The highlight of our day was spending time with new Representative Elaine Bowers. It was fun to see the enthusiasm she expressed toward the work she is now doing. Those who know Elaine are not surprised by this. During our conversations, she took us on the house floor where she introduced us to several new legislators and also the Speaker of the House. We are looking forward to working with Representative Bowers in her new role. Even as a 3 week freshman legislator, she seems very comfortable in this role.

Note to Jim: I am writing at 8:48 PM at the dining room table. Blogging is a part of communicating what is happening in and around the City. I enjoy it, people enjoy it from all over the world (right, I said world), the Commissions likes that I am doing it, therefore, don’t be surprised that I continue to write.

City Sales Tax Increases for January 2007

Today, we received notice of the Sales Tax distribution from the State Treasurer. Collections paid to the City amounted to $131,021.97. January receipts from 2006 were $122,667.98.

It looks like Concordia businesses had an exceptional Christmas season. The growth in the tax receipts from the previous January were 6.8%. Congratulations Concordia businesses.

Happy Birthday Cher