Toxic Management

One of the Blogs I read sent me to the following site http://politiken.dk/newsinenglish/article766260.ece.

It is a study by a Danish expert describing a Danish hospital executive that actually caused his employees to become ill. That is ironic. Where people go to get well is being served by folks who are sick of their work.

I have heard more about this since coming to Hillsboro. It tells me that much of the "new fangled" stuff is leaving out the most important part of managing people. Relationships and behavior of the staff make a ton of difference when dealing with customers. I listen to the Manager Tools podcast every week. If there is one thing I have learned by listening, it is the communication skills of the manager helps create the environment where employee behavior creates the work making the organization successful.

The problem with these toxic managers is that they appear to be doing some good things at the expense of the people who support their work. Workers hope that these managers will be found out and fired. The trouble is that it takes time to see the good people going out the door for Boards to see the trend. In the mean time, good people are gone and performance suffers with the lack of experience of the new employees.

Managers seem to think it is the "bad attitude" of the folks leaving rather than understanding the real problem is the managers themselves.

Boards of Directors, Governing Bodies and senior managers need to spend more time in the hiring process evaluating the potential executive. So much rides on the success of the organization's health that they must select managers who can manage people well and get the job done. This is one reason I spend time at the Manager Tools web site.

Still, there are still too many bosses that believe that they have the God given right to act that way because they are in the "Boss" position.

In graduate school, I read and studied Douglas McGregor's Theory X (the drill sergeant)/Theory Y (relationship manager). The role of an organization's leader is to do two things. The first is the successful completion of the work the organization is there to do. The second is to get people to do the work willingly. Work can be enjoyable and fun while getting the main purpose of the organization accomplished. A tyrant boss can get things done—for awhile—then the organization will deteriorate.

Organizations have a duty to teach "management" and have that be a key trait before making people managers. Just because you are smart, have a degree or are competent in a field of work doesn't qualify someone for a manager's role.

Gallup Poll Finds 57% Believe Stimulus Having No Impact Or Hurting Economy.

I subscribe to a news service from the International City/County Management Association. The item listed below came from today's issue.

USA Today (8/17, Heath, 2.29M) reports, "Six months after President Obama launched a $787 billion plan to right the nation's economy, a majority of Americans think the avalanche of new federal aid has cost too much and done too little to end the recession." A USA Today/Gallup Poll "found 57% of adults say the stimulus package is having no impact on the economy or making it worse. Even more -- 60% -- doubt that the stimulus plan will help the economy in the years ahead, and only 18% say it has done anything to help improve their personal situation."

I would be classified in the 57% based on our experience with ARRA. As you know, Hillsboro received approval to resurface Ash Street to the tune of $412,000 and change.

The stimulus program was sold on having "shovel ready" projects that could be built immediately. That would get money into the economy and therefore get the economy cooking again. It seems that we won't be getting this project started in calendar year 2009 at all. Here is the timeline:

• March--Program approval
  
• KDOT project meetings indicate the projects need to go through KDOT review process
  
• Project design goes from 7 sheets to 36 sheets to meet KDOT Specifications
  
• Project bid letting is scheduled for December 15, 2009
  
• Construction begins sometime in 2010
  

I really like the opportunity for the Federal government to pay for the improvements to Ash Street. BUT, getting an infusion of cash into the economy in a timely fashion is not going to happen.

This was touted as a "jump start" to a stalled economy. If Hillsboro is a barometer of the impact of the Stimulus program, then the program is a failure.

30 Year Celebration

We had a small party today to honor City Clerk Jan Meisinger. Thursday, Jan celebrated her 30^th anniversary with the City of Hillsboro.

Doing anything for 30 years takes a considerable amount of fortitude and dedication. Her work has given her an interesting perspective on how humans work and interact. She would have a bunch of stories about how Hillsboro works. Knowing Jan, I know the secrets are safe—at least until the offer comes to write "the book" we would all like to write about our experiences.

Congratulations on your 30 years with the City of Hillsboro.

Kansas impact on the Economy

Last week, I attended the KU City Manager seminar. The theme of the program was how cities were coping in this economy. The example cities/counties experienced the desperate times we hear about in the news daily.

One thing like to do at conferences with my colleagues is spend time in the halls talking and comparing notes. This year the comments are not like the stories we hear from the major media outlets. Like Hillsboro, Kansas communities are coping well during this time. The more I listened to the stories in the seminar and the stories in the hallway a theory developed in my mind. In Kansas' smaller communities, local governments do not stray far from the core purpose of what government is supposed to do! The purpose of government activities is to do for the community that we can't do for ourselves. When we gather in community living, we try to spread the jobs around. One person does law enforcement, another does fire protection. One provides water and another teaches school. And the activities go on.

In larger communities, there are more people asking for more things to be done and because there is money available, the diversity of activities grows.

This is the contrast I saw last week. Since folks want more and their government is willing to provide it times like we are seeing create pressure to keep doing the same grandiose things. In our smaller communities, I see us doing the core services well and fairly Spartan. (We certainly could use a couple more people in certain areas too.) We are living within our means and we have a sense of not getting too extravagant. The Midwest work ethic plays here too.

So my unofficial poll is this, we are doing well compared to the east and west coast. We are thankful that our community does not hurt like those I heard about last week.

And they say Crime Doesn’t Pay

One of the Blogs I read regularly is one called Evolving Excellence. The March 31, 2009 posting summarizes some thoughts I have concerning our financial situation. I pasted it below for you to see. One of the thoughts I had yesterday while reflecting on the GM CEO sacking was how similar it is to the actions the CIA took in the 1960's and earlier with foreign governments. If our government didn't like the leader of another country, we set about to have a coup and "bam" they were gone or dead. About the only nice thing about the past weekend's maneuvering is Mr. Wagoner only lost his job.

 

Posted: 30 Mar 2009 03:24 PM PDT

By BILL WADDELL

Bank of America got $25 billion last Fall, then another $20 billion in January, plus a guarantee against losses of $118 billion, and now the New York Times is reporting that the bank also grabbed another $5.2 billion unbeknownst to the rest of us through an outfit called American International Group. By my arithmetic, that comes to a shade over $168 billion of our cash the bankers needed to cover their screw-up.

Part of the bailout money went to cover the $20 billion+ losses of Merrill Lynch, which the B of A bought knowing full well that Merrill Lynch had lost all that money. It also went to pay hundreds of millions of dollars in bonuses to thousands of Merrill Lynch employees right before the deal closed.  The B of A then covered the bonuses with the first bailout check, and is now dragging their feet as the New York State Attorney is demanding the details.

The boss at the Bank of America - a good old boy named Ken Lewis - not only stays out of federal prison, he keeps his $10 million a year job.  Note: In fairness to Mr. Lewis, he demonstrated great personal sacrifice by settling for $10 million in 2008 while the bank was in D.C. with its grubby hands out.  The previous year he took home $20 million.

Contrast that sad story with GM.  They get $9.4 billion - 95% less than the shifty banker got.  And now for reasons Mr. Obama has yet to explain, if GM wants another dime, the big boss has got to go. Rick Wagoner is fired.

As readers of Evolving Excellence well know, I am hardly a member of the Rick Wagoner fan club, but no one has ever breathed an insinuation that he is sneaky, devious or in any way dishonest - like the bankers and brokers with their bonus shenanigans.  No State's Attorney's Office has reason to investigate Wagoner, or his management of General Motors  

What are we to think of this other than to draw the obvious conclusion:  The folks in the financial community can play as fast and loose with ethics, the law and other people's money as they want without consequences? Manufacturers, on the other hand, can't even fail, let alone wallow in the self-serving ethical sewer the bankers and brokers inhabit, without losing their jobs.

What's up with that???

There might have been some logic behind it had Obama demanded that GM put a manufacturing pro in charge like Alan Mulally at Ford where a bailout wasn't needed, but no.  Wagoner is being replaced by Fred Henderson - another in a long line of career GM accounting and finance guys a whole lot like Wagoner.  So what's the deal?

We are told we have to follow through on bonuses to sleazy bankers and Wall Street shysters or else they won't be able to attract the best talent.  But throw the manufacturing bum out on his ear - after all, anybody can run factories ... is that it Barack?  Screw the manufacturers and fawn over the bankers and brokers? 

Why didn't UAW President Ron Gettlefinger get canned part of the mandate? Didn't the union have an awful lot to do with the mess at GM? Or maybe canning Wagoner is Obama's way of helping his union backers by giving GM management a hearty head slap. 

Whatever this deal, it is, like just about everything Obama has touched in his first few months on the job, it stinks. Bankers and union bosses sail through the economic mess unscathed, while manufacturing management and manufacturing workers get the shaft.

Most laughable is that the auto industry crisis is largely the result of bankers so fouling things up that no one can get a car loan.  If the Bank of America had found their way clear to make just a little bit of the $168 billion available for people to buy Chevys, maybe GM wouldn't be in such dire straits.  Just a billion or two of it would have helped, but no, that hasn't happened. 

You blew it Rick.  You have acted honorably, and naively thought you were dealing with honorable people. Shoulda paid yourself a whopping bonus out of the $9.6 billion instead.

The wonderful world of municipal finances

This is a long and involved posting about the City's 2008 and 2009 finances. I didn't expect it to be as involved as it ended up. It is technical and really designed to supplement the article that appeared in the Free Press last week. This is their story. Hillsboro Free Press - City intends to monitor cash flow in troubled economy

The City of Hillsboro is starting 2009 as a number of other organizations—watching where and for how much our revenue stream takes us this year. Because of the national economy, how we operate the many facets of what we call the City of Hillsboro will be different in 2009 compared to any recent year of operation.

For most of 2008, I watched two of the city's funds—electric and water. Earlier in the year, I reported to the city council that the utility funds were under financed. We passed rate increases in Water, Sewer, Electric and Sanitation. Because of the cooler, wetter summer, water consumption was lower than the recent history shown here.

	Water Consumption.
	in Gallons
2002	112,894,350.00
2003	103,875,606.00
2004	102,557,808.00
2005	93,061,646.00
2006	99,762,566.00
2007	91,054,053.00
2008	87,229,292.00

 

We all felt the hurt of rising fuel costs during the summer of 2008. In the electric utility, we felt the hurt of fuel costs in the cost of power. The cost of power always includes cost of fuel as one of the components. In 2008, our fuel adjustment was $432,525. When we forecasted the rate adjustment, we were expecting $272,613. Another way of saying this is the projected fuel cost was $0.0098 per Kwh. In August, we paid $0.031 per Kwh. The table below shows that the cooler weather this summer also affected the electric utility.

	Total	Total
	KWH	Sales
2,001	21,301,884	1,898,523.03
2,002	21,966,858	1,942,454.45
2,003	21,330,321	1,904,157.48
2,004	21,583,919	1,993,473.74
2,005	22,478,221	2,069,403.19
2,006	22,512,665	2,064,434.00
2,007	22,911,018	2,133,872.89
2,008	22,664,202	2,067,733.46

 

Traditionally, the City's general fund receives a transfer from the utility funds. Since the cash flow here was so low, we did not transfer the full amounts. Since every action has it consequences, the impact on the general fund was that $125,000 that it would have been received wasn't. We finished 2008 with a lower cash balance there as well. The bottom line for us is that we will be looking at possible rate changes in 2009 as a result of the lower than projected revenues. I am working on recommendations to the City Council now.

The rest of this post will be for the die-hard finance person interested in seeing how the municipal finance world works. If you bail out now, I won't be offended. It is stuff I need the keep the City Council updated on to fulfill our financial accountability responsibilities. Don Ratzlaff's (Hillsboro Free Press) story about our efforts covers the basics.

So the question "Larry, why should we care about these cash flows?" The Kansas "cash basis law" requires that we keep positive balances throughout the year including having a positive balance at the end of the year. As a result of not having a larger cash balance several months will have negative balances, thus violating the law. I know this now because I have projected the revenues and expenditures of several funds to see this.

The City of Hillsboro has 39 separate and distinct funds. It is somewhat like running 39 different companies and each of them must be profitable every month and at the end of the year. A large number of these were created for what is called a "special purpose." We have a number of funds for the Public Building Commission, Recreation Commission and several unique funds like the tree fund, K-9, DARE, paying sales tax and employee withholding taxes.

I said two paragraphs up that I was projecting the revenue/expense stream of several funds. What I am actually tracking are 17 distinct funds. These are the funds where a considerable amount of business is being done. Here is a list:

1. General
   

1. Library
   

1. Recreation
   
2. Special Highway (Gas Tax for repairing roads)
   
3. Industrial
   
4. Special Law Enforcement/Fire
   
5. Family Aquatic Center
   
6. Equipment Reserve
   
7. Sales Tax
   
8. HCMC Plant Property and Reserve
   
9. PBC Family Aquatic Center
   
10. Capital Improvement
    
11. Bond and Interest
    
12. Water
    
13. Electric
    
14. Sewer
    
15. Sanitation
    

An example of the complexity of the cash flow process is tracking the General Bond & Interest fund. It receives payments from other funds (City of Hillsboro companies like water and sewer) to pay debt issues. These debt instruments receive principal and interest deposits at least two times per year and are then paid twice a year. What makes this fund "fun" to watch is that the first series of payments start February, March, and April and the second set start in July and go through October. Each debt issue requires payment in the Bond & Interest Fund the month before it is to be paid. The Bond & Interest fund is also property tax supported, the property tax revenues received from Marion County must be in the Bond & Interest fund as well.

One of the more unusual flows of cash occurs with the Family Aquatic Center. When the sales tax issue was approved to build the pool, a Public Building Commission (PBC) was formed to be the owner of the pool during the duration of the pool debt. Sales tax is deposited in the General fund then transferred to the Family Aquatic Center (number 7 on the list above) as rent. Then the Family Aquatic Center makes a payment to the PBC Family Aquatic Center (number 11 on the list above) and that fund makes the pond payment. In my view, there is one too many funds in that transaction—that being #7 Family Aquatic Center.

New "Hillsboro" Sign is Up

I just have to brag about persistence. There is a new billboard sign on Highway 50 telling the world how to get to Hillsboro.

Most folks remember the former sign was broken down and needed to be replaced. The Chamber of Commerce was responsible for its maintenance and keeping the rents coming. When the director resigned this spring, Clint Seibel, Executive Director Hillsboro Development Corporation, took up the cause to get the sign rebuilt. The old sign had to be removed. A design needed to be developed. A new agreement needed to be reached with the land owner. Funds needed to be raised for the construction and printing of the new sign. An application needed to be approved by the Kansas Department of Transportation before construction could be started. Clint worked on this over 8 months. Now it is done. It looks great.

Hillsboro’s New Welding Program

The third of this year's economic development projects came to life yesterday. The new welding program under the guidance of Butler Community College (El Dorado) started class with five students. The program is to train new welders to meet the needs of our two trailer manufacturers. Read and watch the Wichita Channel 12 report here. There is a video clip there too.

This project started early this year with the idea of having a ready resource of welding talent in the Hillsboro/Marion County area. Recruiting welders to the two trailer manufacturing businesses was tough given the strength of the US Dollar helping nearby AGCO in Hesston. They were hiring everybody they could so they could build farm machinery for sale overseas. Our local businesses wanted to expand their operations but the supply of trained workers was very small. The answer was to build a training center where folks could be trained, get a nationally recognized certificate and have an industry ready to hire the best students in the class.

To make the situation work, local industry met with the City of Hillsboro Butler Community College and representatives of the Kansas Department of Commerce. All these folks had their hand in making this program start. Hillsboro Industries manager, Phil Wyssenbeck, sits on a Department of Commerce Work Force Development Council. His efforts brought the Department of Commerce to the table. This gave access to a $100,000 grant to purchase equipment for the classroom. The City of Hillsboro had space in the AMPI building that was large enough for both the shop and the classroom.

Once all the details were worked out, City of Hillsboro staff and contractors began a short timeline project to get everything ready for the first day of class. We had to reroof the portion of the building to be used by the program, add heating and air-conditioning, rebuild one of the dairy work rooms into a classroom with a teacher's office, replace doors to meet current industry standards, and install air a make-up system so welding fumes can be exhausted.

The objective is to train 15 students at a time in the program in 8 week sessions. This class started with five. It is a great start. Now we will nurture it and help it grow.

National Financial Crisis

The past couple of weeks watching the various players in the financial crisis has me reflecting on our country's history. The memories of the crash of 1929 were told to me by my father and grandparents. Decisions they made subsequent to the depression were forged by that experience.

We are now hearing that some of the laws that came out of that time to protect us from future problems were based on "crowd think." A story I heard on NPR last week as I came home from work suggested the divisions and regulations of investment banking and commercial banking were based on bad analysis. Back then, any bank could be both a commercial bank, taking deposits and doing loans plus have the ability to sell stocks and bonds. It was assumed then that the commercial banks had a hand in selling more risky "paper" to their customers. The historical research since then has (according to the NPR story) proved that the commercial banks did a much better job of selling "good" stocks and bonds than did other financial institutions. A couple of Senators got together and wrote a set of regulations that focused on dividing the business so commercial banks could no longer sell stocks and bonds.

Pondering this leads me back to one of the first blogs I wrote. My dad sent me some money for my birthday and as I normally do, I went to the book store and spent it "wisely." I purchased Tom Peters book Re-imagine. The early chapters had me thinking about the consequences of bad decision making. In business, the consequences results in bankruptcy. Of course, there are a number of other casualties in the business failure. Employees of the firm are as directly affected as ownership. There is financial pain and suffering with both parties but in one sense it is different. Employees are putting their trust in ownership that they make good decisions to keep the firm going. The business either restructures or goes away. The penalty for bad decision making is the death of the company. There are consequences and they are sometimes harsh.

This led me to continue thinking about bad decision making in government. Typically the consequences are not the same. What would normally result in a business death does not happen in government. Maybe someone gets fired but the organization goes on. What usually happens is the organization is reorganized and someone has to clean up the mess. That usually means a new set of taxes to pay for the problems left behind.

So, watching the current situation, we see a clamoring by national figures saying "protect us from the bad decisions people make." There are, of course, impacts on the general public. There will be hard times. But isn't this somewhat nature's way of getting things back in balance when we get out of balance. Having the Federal government step in and save the situation is not good. We have learned that the government will always be there to protect us from the "bad" while letting the good happen. Accountability is lost. I expect we will not learn from these events and we will be paying more taxes until the next lesson comes along. Maybe then, we will learn.

Measuring the Heartbeat

Monday mornings are a time for Clint Seibel to meet and talk about the world of economic development. Monday this week was different. We walked up to the ribbon cutting for Bill and Olivia Good's new business—Good Health Chiropractic and Diagnostic Center. The nice part of visiting was measuring the heartbeat of Hillsboro business. When you see a new business opening in town you realize the risk folks take to pursue their passion. There are a number of other things to see as well. Such as:

1. There is a store front that is now occupied
   
2. That storefront has been reconditioned to an exquisite new facility with modern equipment.
   
3. There is another young family in town (adding to the future school population is a good thing)
   

In earlier reading in economic development literature, multiple businesses of similar type are good for each other. The book I am remembering quoted the presence of antique stores. One is a struggle but having three helps survival. The lesson for Hillsboro points to our multiples in business. We have multiples in the following: hardware, Chiropractic, auto sales, auto repair, gas stations, and grocery. I am sure I have left something out but you get the point. When you have a multiple of a business folks will look at both. Purchasing opportunities go up and all the businesses do better because of the competition.

So, here is the first look at the business heartbeat. The next few months will have similar ribbon cuttings. That is good—very good.

Senior Executive Institute

I am just finishing a two week Senior Executive Institute at the University of Virginia. The experience has been great! The food has been outstanding and the learning experience better than the food.

The primary goal of the course has been to teach leaders of local government how to lead their organizations to a new high performance level. To learn this, we had several grueling days of classroom work and small group exercises to show how creating a high performance team can be done. My group has shown this in incredible ways.

Our first challenge was in a fun environment – bowling. Our challenge was to say only positive and encouraging statements and to increase the performance of the team from game one to game two. My incredible team had the top men's score, the top women's score, the greatest improvement from game one to game two and the third best women's score. I was the champion of the 9 pin game. I got more 9 pin frames than the rest of the team but no one was counting that. I did get one strike to contribute to the improving scores!

While the games had their place, the real learning came in working with the small group. Our group included three city managers, one librarian, a Public Information Officer, a Public Works Director and the Executive Director of a Recreation District. Each contributed to my experience and to the total learning experience.

We had our challenges getting together initially but are not just seven individuals but one fully functioning group. The experience puts the reality of our organizations at home and how they perform in a new light. What you expect of our organization has a number of variables. There is a performance level—what we get done and the experience you have when we perform it. This causes us to look at what we are doing and then ask is this the right what? (I think you need to say the last sentence out loud to get the right meaning. Emphasize the last underlined what.) If what we are doing is not the expectation of the community then we are not performing at the level that makes for a satisfied constituency.

This is just a small example of our week.

Windfall profits

One of the blogs I read is called Evolving Excellence. It is generally focused on a manufacturing process called "lean." Today the author takes a poke at what he calls the economic illiterate and the subject of oil company windfall profits.

Since oil prices have jumped in the past year (I remember 19 cents a gallon), folks are going bonkers at the amount of profit oil companies are making. Go to the following site and see what other companies are making and not getting the "trash news" oil is getting.

http://www.superfactory.typepad.com/

Economists are changing their tune

I have a subscription to a daily review of news items prepared by US News and World Report for ICMA – the International Association of City/County Management.

Wednesday's edition referenced a Wall Street Journal article that said economists are changing their minds about the recession. Evidently "it took a detour." Wachovia economist John Bryson now says the chance of a recession is 45% which is down from 90% in April.

This is good news because what I see here in Hillsboro contradicts the notion of a recession as well. Two key indicators everyone here can see for themselves. Rod's Tires is building additional space and Elcon Electric is building a new building. Both are in our Hillsboro Heights subdivision. The two other indicators are the agreements the council approved this week selling land for two more businesses to begin. We are keeping a number of other eggs warm waiting for them to hatch.

These activities make the opportunities we will have with Buxton and their retail business possibilities more positive. When we can go into a potential business partner and cite the activity it is hard for a business partner to ignore us. They want to be where things are happening. Right now, things are happening.

Kansas Sampler Fest

I just returned from Concordia and the first year of their Kansas Sampler Fest. Every town gets a two year contract. This was their first.

Driving there Friday was interesting with the wind blowing and storm clouds forming. Earlier in the day, my wife drove to Colorado Springs and she said the driving conditions were Terrible. For dinner, I was escorted to the Annual Rotary District Convention dinner where I heard one of the smartest ladies I have met. I wish I had her name right now to share with you. She is the construction project manager for Horizon Wind Energy, the company building the wind farm in Cloud County. It is a project I was aware of while I worked there but because it was county, I wasn't directly involved. It is great to see the project progressing. There will be 67 wind towers constructed before the end of November. Each will generate 3 megawatts of energy. One tower would take care of our electric needs in the winter. We need 2+ for the summer

The Kansas Sampler Fest is an annual event to promote tourism in Kansas. Everything was Kansas. Folks showed off things they make here, events to go to and places you could go just to enjoy. Some of the things folks were doing were driving to every County Courthouse, buying fabric in every county (I think there is a quilter there), and buying a fence post in every county.

Saturday morning I met my Sampler Partner, Marion County Economic Development Director Teresa Huffman. We started putting information bags together early and it seemed that we were doing that constantly from 10 AM to 2 PM. Scattered throughout the day were familiar faces from Concordia and the surrounding area. I saw a number of folks I used to work with – Joe, Darrel, Charles, Art, Izzy (The octogenarian promoter of Concordia, Larry, Larry (both were not me), Lisa, several fire department personnel including one we sponsored for paramedic school, Ruby, Cher. One of my friends sang Happy Birthday to me. One special sight was seeing Dana. She is just recovering from cancer treatment.

Sunday was less hectic from a crowd perspective. The first entertainment I listened to was "The Brothers and Sisters" from Goessel. I recognized Kathy from our P.O. and Goessel City Clerk Anita Goertzen. One of the guys sounded just like John Denver. Incredible!

While I enjoyed seeing friends the most important thing was promoting Marion County to folks who were not familiar with us. We had two gifts to give-away. They were a night in one of seven bed & breakfast establishments in the county and dinner in any of our county's restaurants. I learned the secret to signing your name and dropping a registration in to a "chance box." That is why it is still a secret!

One key point in attending a festival like this is getting our name in front of folks who would visit and spend a little time here. We distributed a number of boxes of stuff about the county's activities. My obvious opportunity was talking about the Art's and Craft's Festival in September. It was fun to hear from the folks who came to Hillsboro in the past and how they liked our town.

I hope a number of you will be able to join me there next year.

Waste Treatment Plant Started

The election season is nearly over for municipalities. My blog entries are intentionally sparse during this period. Things are pretty quiet here compared to some places I have been. My general comment about elections is that "you must vote to have any chance to complain."

We are under way on the construction of the new wastewater treatment plant east of town. We hope that we will be treating water this time next year. When I came to work last summer, Delores said that she was frustrated with how long it is taking to get started. That was a clue to "make something happen." We had to "urge" the engineers to move ahead and "urge" the Federal agency providing the funding to clear the path so we could start bidding. At one point, we needed Congressman Jerry Moran's office for help. The help was appreciated and we are working.

The treatment process will be different than our current facility. We are going to a "lagoon system" from a "mechanical" plant. The biggest difference in the two systems is the lower electrical use that will be in the lagoon process. Our current plant requires the use of blowers to put large amounts of air in the waste treatment tanks. That air keeps the bugs healthy as they do the things they do. The "bugs are a number of single cell organisms that feed on the dissolved waste.

I wondered how I would use my high school biology course – now I know.

Getting things done

One of the stories I heard on my short drive home tonight was one on NPR about the book "Getting Things Done." http://www.npr.org/templates/story/story.php?storyId=19105832

Being a manager at any level is about getting things done and any tips you can learn to be better at it is worth the time. NPR has an audio clip of the story they ran that you can listen to as well.

Hey, it is just over 4 minutes. You can stop and listen at least that long!

Street Sweeping

I was talking with Steve Millett today about today's street department activity. He was working at sweeping the streets.

It is a normal task for this time of year. They are spending their time picking up the sand that was spread during our earlier snow and ice storms. If you didn't know, we purchased a new sweeper last summer. It does a great job. Since the curbs in Hillsboro are not the same from block to block, the operator has to adjust the brooms for each block. It is one of the things that help us clean properly.

Steve mentioned today that cleaning in the spring is more difficult than other times because we still have some leaves in the curbs. He has been sweeping each block up to four times to get the cleaning done due to the matted leaves and accumulated dirt/sand.

As we move into Spring expect to see us "spiff" up the town and get rid of the vestiges of winter. Oops, the weather forecast has flurries predicted tonight. Maybe there will be some more sweeping after the scooping!

A need to Brag

I came in to work this morning with snow dragging under my car as I backed out of the drive way onto a freshly plowed street.

I have the pleasure of working with some very fine street crew workers here as well as Concordia, Baldwin City and Jerome, Idaho who clear our streets so we can get around. (These are towns where I worked that had regular snow fall.)

To get ahead of the traffic means they had to start pretty early. Key to doing a good job and getting downtown ready for business is grading before traffic starts to pack the snow down.

Here in Hillsboro, we are starting to pay attention to streets again after a period of ignoring them. The time between John Unruh and Dale Dalke has been stressful on the street infrastructure. We will be paying for it for awhile. In the meantime Dale and the crew of Steve Millett and Lance Booker will be working hard to make our driving experiences better.

While I am remembering folks, Ron and Jim in Concordia, Bill in Baldwin City and John in Jerome - you guys rock!

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.