Be sure to check out this new blog.
It is a conservative blog run by Mark Newgent, a former fraternity brother of mine at the University of Maryland. (For professionalism reasons, I am withholding Mark's college nickname from the record.)
Mr. Newgent is also running for Baltimore City Council.
If you live in Baltimore (attention: my friends in Federal Hill), it may be wise of you to follow and contribute to Mark's campaign, so check it out!
Thursday, August 9, 2007
Capital Projects
Today AP celebrates the 5 year anniversary of the founding of his company, and I am celebrating by undertaking a combination of household chores, DVD viewing....and blogging!
I have decided to try and improve the transparency of government, in this case by listing the 10 most expensive projects funded in the FY 2008 capital budget.
The operating budget funds recurring expenses, such as employee/police/fire salaries. It may surprise you to know that the vast majority of your property tax money is designated in negotiations between the city and whatever union it is negotiating with to renew contracts--and there is not a whole heck of a lot we can do about it. The operating budget this year is about $75 million, and come of this goes to the below mentioned capital budget.
The capital budget is where the real money is spent, on infrastructure, renovation, and things of this nature. Some $186 million in capital projects are funded this year. The amounts that are listed represent the total amount spent on these projects in all years, not the amount spent this year.
So here they are:
1. Hillman Parking Garage Replacement-$22.5 million
2. Police Department Renovation (late and over budget) $15.1 million
3. General Roadway Improvements-$14.5 million
4. Undergrounding of Power Lines-$14.4 million
5. New Recreation Center-$14 million
6. Outer West Street Gateway-$10 million
7. City Dock Bulkhead Replacement-$8.9 million
8. Maryland Avenue Improvements-$6 million
9. Truxtun Park Pool Replacement-$5.9 million
10. Sixth Street Improvements-$4.4 million
As you can see, these projects cost a lot of money. As citizens, we need to get involved early in the process and voice our disagreement if we don't want to pay for a specific project.
Some of the projects are unquestionably legitimate--but some are controversial. The West Street Gateway is basically a $10 million arch-way and welcome sign at the west boundary of the city limits near Old Solomon's Island Rd. Do we really need this? Not to mention they want to put a traffic circle there, with a major traffic light/intersection only 500 feet away.
Why are we spending $14.5 million on general road improvements, AND ANOTHER $4.4 million on Sixth Street alone? Is this a gateway to Eastport? I would be that Eastport residents would much rather trade the Sixth Street Improvements for more police to combat the recent wave of violent crime there.
Taxes and the budget are probably the most important things the city does. Stay vigilant, and watch how your money is spent!
I have decided to try and improve the transparency of government, in this case by listing the 10 most expensive projects funded in the FY 2008 capital budget.
The operating budget funds recurring expenses, such as employee/police/fire salaries. It may surprise you to know that the vast majority of your property tax money is designated in negotiations between the city and whatever union it is negotiating with to renew contracts--and there is not a whole heck of a lot we can do about it. The operating budget this year is about $75 million, and come of this goes to the below mentioned capital budget.
The capital budget is where the real money is spent, on infrastructure, renovation, and things of this nature. Some $186 million in capital projects are funded this year. The amounts that are listed represent the total amount spent on these projects in all years, not the amount spent this year.
So here they are:
1. Hillman Parking Garage Replacement-$22.5 million
2. Police Department Renovation (late and over budget) $15.1 million
3. General Roadway Improvements-$14.5 million
4. Undergrounding of Power Lines-$14.4 million
5. New Recreation Center-$14 million
6. Outer West Street Gateway-$10 million
7. City Dock Bulkhead Replacement-$8.9 million
8. Maryland Avenue Improvements-$6 million
9. Truxtun Park Pool Replacement-$5.9 million
10. Sixth Street Improvements-$4.4 million
As you can see, these projects cost a lot of money. As citizens, we need to get involved early in the process and voice our disagreement if we don't want to pay for a specific project.
Some of the projects are unquestionably legitimate--but some are controversial. The West Street Gateway is basically a $10 million arch-way and welcome sign at the west boundary of the city limits near Old Solomon's Island Rd. Do we really need this? Not to mention they want to put a traffic circle there, with a major traffic light/intersection only 500 feet away.
Why are we spending $14.5 million on general road improvements, AND ANOTHER $4.4 million on Sixth Street alone? Is this a gateway to Eastport? I would be that Eastport residents would much rather trade the Sixth Street Improvements for more police to combat the recent wave of violent crime there.
Taxes and the budget are probably the most important things the city does. Stay vigilant, and watch how your money is spent!
Wednesday, August 8, 2007
Taxes
AP has not reviewed many letters to the editor recently--partly because we have covered many of the topics of these letters already, and partly because MTV has been airing back-to-back episodes of Made.
But the time has come. This letter is a tad wacky, but touches a few important issues:
Gov. Martin O'Malley wants to ease the state's deficit by not letting the rich pay just the 4.75 percent paid by everyone who earns $3,000 or more, a setup he calls "patently unfair."
The letter writer is referring to the Maryland Income tax. Now then, collecting the SAME PERCENTAGE of taxes from EVERYONE is THE FAIREST tax system you could possibly have. O'Malley's quote was:
"O'Malley called the structure "patently unfair" this week, saying at a Democratic breakfast in Frederick that Peter Angelos, the wealthy trial lawyer who owns the Baltimore Orioles, should not pay the same rate as "the woman who cleans his office".
Uhhh, geez....Governor....didn't anyone tell you: 4.75% of what Peter Angelos makes is a lot MORE than 4.75% of what the housekeeper makes. Why shouldn't everyone pay the same rate? The American Dream is to work hard and get rich...why are we penalized for doing this? Ok letter writer, continue.
Why not have the rich pay 10 percent for incomes over $100,000 and 20 percent for those over $200,000?
Why stop there? How about 100% for $1 million? Great. So the most anybody can make is $1 million, because every dollar after that goes to the government. Then, nobody would have the incentive to keep working hard, and productivity would decline! Excellent! Wait a minute....
Constellation Energy's chief executive officer is taking home $20 million a year.
Making money is not a crime; it is not evil. 99.97% of all people in history would have liked to make as much money as possible. I rather enjoy how you singled out this corporation, being that they are involved in the electric rate hikes, and so forth. The fact is, he is paid that much because that's how valuable he is to the company. If Constellation Energy thought they could achieve the same results by paying less money, I promise you they would do it.
The rich get a lot of their money out of the middle class and the poor.
I can't let this one go. First of all, this is such a vague generalization that it can't be true, even if we understood what you were trying to say. People are paid what they are worth; sometimes there are distortions and people don't make exactly what they are worth, but in the long run your compensation equals the value of goods or services that you produce.
The important point here is that in a capitalist economy without coercion, the value of goods and services is determined through trillions of VOLUNTARY transactions. So, if a middle class or poor person decides to buy something, they are by definition using the price system of the free market to transmit the message that the good or service improves their life. So long as money is spent voluntarily, transfers of money from rich to poor, or poor to rich--indeed all transfers--are beneficial to both parties. (Such a transaction is said to be Pareto Optimal)
Meanwhile, Senate President Mike Miller, D-Calvert, wants to hike the "regressive" sales tax--which, in hitting all buyers at the same rate, hurts the rich less, and hurts the middle class and poor more.
IF A TAX HITS ALL BUYERS AT THE SAME RATE, HOW CAN IT POSSIBLY HURT SOME BUYERS MORE THAN OTHERS???????
House Speaker Mike Busch, D-Annapolis, wants another regressive measure, a 5 percent hike in state college tuition. His opposition to higher tuition was one of the big reasons many of his constituents campaigned and voted for him in 2006.
First of all, he is one of the most 'machine-backed' politicians in the state, and his constituents damn near voted him out of office in 2006. If it hadn't been for such widespread dislike of the Republican President at that time, I bet we wouldn't be having this conversation. Second of all, a hike in college tuition is not regressive in the manner that you speak of because it is not a tax--it is not imposed on all taxpayers by the government. It is imposed on people who CHOOSE to attend the university. On a side note, tuition freezes are bad.
Many parents and students have already been forced into debt to meet tuition increases. Mr Busch's hike would be a vicious blow to lower middle class and poor families who struggle to get their kids through state colleges.
Going into debt is not an uncommon practice for college. People calculate that going to college will help increase their human capital--an investment in themselves--that will help them earn more money in the future so they can pay off their debt and then some. Banks think this too, and will give you student loans. If somebody decides this process is not worth it, they can CHOOSE not to go to college.
Back across the hall, Mr. Miller is pushing for his favorite plague on the poor--slot machines. It's a boldface lie that slots will ease the deficit. The state's take must finance more regulators and inspectors, and more counselors for gambling addicts and for the families of gamblers who commit suicide.
Do the poor not have minds of their own? If they think slots are a plague, they can avoid them like anyone else could. Also, how can slots NOT ease the deficit? Estimates place the boost in taxes from slots at $500-$800 million. How many inspectors do you need? Also, here's an idea: families support themselves and don't allow their relatives to get addicted to gambling or commit suicide. In the horrible and unlucky event that a relative does commit suicide, why is it the responsibility of the taxpayers to pay for the grieving process?
The kneejerk reaction to the deficit is to saddle the weak (and) the poor with it. Where are the ideas for making the strong and the rich--and the corporations, developers and utilities--shoulder some of it? Half of Maryland's largest for-profit corporations pay no income tax at all!
J.A. HOAGE, Severna Park
OMG!! The top 10% of income earners pay like 65% of the total taxes. I would say that the rich not only shoulder 'some' of the tax burden--they shoulder most of it. Also, do you work for either a corporation, developer, or utility? Odds are you do, or someone close to you does. If you keep penalizing corporations, they will move to a different state that is nicer to them. This is why some corporations (legally) avoid some taxes now. And, if you keep raising taxes on corporations, they will face a higher cost structure. They will have to raise prices on whatever they are selling. Since fewer people will buy from that corporation after they raise the prices, the corporation will not have as much work or make as much money. The you, or someone close to you, will lose your/their job.
There is no magic tax solution. All taxes necessarily re-distribute income and create deadweight loss. The less the government spends, the less this will happen.
But the time has come. This letter is a tad wacky, but touches a few important issues:
Gov. Martin O'Malley wants to ease the state's deficit by not letting the rich pay just the 4.75 percent paid by everyone who earns $3,000 or more, a setup he calls "patently unfair."
The letter writer is referring to the Maryland Income tax. Now then, collecting the SAME PERCENTAGE of taxes from EVERYONE is THE FAIREST tax system you could possibly have. O'Malley's quote was:
"O'Malley called the structure "patently unfair" this week, saying at a Democratic breakfast in Frederick that Peter Angelos, the wealthy trial lawyer who owns the Baltimore Orioles, should not pay the same rate as "the woman who cleans his office".
Uhhh, geez....Governor....didn't anyone tell you: 4.75% of what Peter Angelos makes is a lot MORE than 4.75% of what the housekeeper makes. Why shouldn't everyone pay the same rate? The American Dream is to work hard and get rich...why are we penalized for doing this? Ok letter writer, continue.
Why not have the rich pay 10 percent for incomes over $100,000 and 20 percent for those over $200,000?
Why stop there? How about 100% for $1 million? Great. So the most anybody can make is $1 million, because every dollar after that goes to the government. Then, nobody would have the incentive to keep working hard, and productivity would decline! Excellent! Wait a minute....
Constellation Energy's chief executive officer is taking home $20 million a year.
Making money is not a crime; it is not evil. 99.97% of all people in history would have liked to make as much money as possible. I rather enjoy how you singled out this corporation, being that they are involved in the electric rate hikes, and so forth. The fact is, he is paid that much because that's how valuable he is to the company. If Constellation Energy thought they could achieve the same results by paying less money, I promise you they would do it.
The rich get a lot of their money out of the middle class and the poor.
I can't let this one go. First of all, this is such a vague generalization that it can't be true, even if we understood what you were trying to say. People are paid what they are worth; sometimes there are distortions and people don't make exactly what they are worth, but in the long run your compensation equals the value of goods or services that you produce.
The important point here is that in a capitalist economy without coercion, the value of goods and services is determined through trillions of VOLUNTARY transactions. So, if a middle class or poor person decides to buy something, they are by definition using the price system of the free market to transmit the message that the good or service improves their life. So long as money is spent voluntarily, transfers of money from rich to poor, or poor to rich--indeed all transfers--are beneficial to both parties. (Such a transaction is said to be Pareto Optimal)
Meanwhile, Senate President Mike Miller, D-Calvert, wants to hike the "regressive" sales tax--which, in hitting all buyers at the same rate, hurts the rich less, and hurts the middle class and poor more.
IF A TAX HITS ALL BUYERS AT THE SAME RATE, HOW CAN IT POSSIBLY HURT SOME BUYERS MORE THAN OTHERS???????
House Speaker Mike Busch, D-Annapolis, wants another regressive measure, a 5 percent hike in state college tuition. His opposition to higher tuition was one of the big reasons many of his constituents campaigned and voted for him in 2006.
First of all, he is one of the most 'machine-backed' politicians in the state, and his constituents damn near voted him out of office in 2006. If it hadn't been for such widespread dislike of the Republican President at that time, I bet we wouldn't be having this conversation. Second of all, a hike in college tuition is not regressive in the manner that you speak of because it is not a tax--it is not imposed on all taxpayers by the government. It is imposed on people who CHOOSE to attend the university. On a side note, tuition freezes are bad.
Many parents and students have already been forced into debt to meet tuition increases. Mr Busch's hike would be a vicious blow to lower middle class and poor families who struggle to get their kids through state colleges.
Going into debt is not an uncommon practice for college. People calculate that going to college will help increase their human capital--an investment in themselves--that will help them earn more money in the future so they can pay off their debt and then some. Banks think this too, and will give you student loans. If somebody decides this process is not worth it, they can CHOOSE not to go to college.
Back across the hall, Mr. Miller is pushing for his favorite plague on the poor--slot machines. It's a boldface lie that slots will ease the deficit. The state's take must finance more regulators and inspectors, and more counselors for gambling addicts and for the families of gamblers who commit suicide.
Do the poor not have minds of their own? If they think slots are a plague, they can avoid them like anyone else could. Also, how can slots NOT ease the deficit? Estimates place the boost in taxes from slots at $500-$800 million. How many inspectors do you need? Also, here's an idea: families support themselves and don't allow their relatives to get addicted to gambling or commit suicide. In the horrible and unlucky event that a relative does commit suicide, why is it the responsibility of the taxpayers to pay for the grieving process?
The kneejerk reaction to the deficit is to saddle the weak (and) the poor with it. Where are the ideas for making the strong and the rich--and the corporations, developers and utilities--shoulder some of it? Half of Maryland's largest for-profit corporations pay no income tax at all!
J.A. HOAGE, Severna Park
OMG!! The top 10% of income earners pay like 65% of the total taxes. I would say that the rich not only shoulder 'some' of the tax burden--they shoulder most of it. Also, do you work for either a corporation, developer, or utility? Odds are you do, or someone close to you does. If you keep penalizing corporations, they will move to a different state that is nicer to them. This is why some corporations (legally) avoid some taxes now. And, if you keep raising taxes on corporations, they will face a higher cost structure. They will have to raise prices on whatever they are selling. Since fewer people will buy from that corporation after they raise the prices, the corporation will not have as much work or make as much money. The you, or someone close to you, will lose your/their job.
There is no magic tax solution. All taxes necessarily re-distribute income and create deadweight loss. The less the government spends, the less this will happen.
The Director of What?
While reading an article on the Truxtun Park Penguins, the watchdog (or cynic, as the case may be) in me kicked in, and I couldn't help but wonder.
It seems that the coach of the team, Jennifer Bistrack, is taking a job with the city later this summer as the Director of Health and Aquatics.
I did some research on this position operating under the following 2 assumptions:
1. this position is located in the Recreation and Parks Department
2. the funding for this position would be included in the FY 2007 budget
If the above are true, then we may have a problem. Although last year's rec & parks budget included requests for a horticulturist and a turf specialist, it made no mention of a Director of Health and Aquatics. How much does this person make, and where does the money come from?
But the real question is, do we really need this position? The city owns precisely 1 pool, right? Truxtun Park? Ok. Forgive me, but I just can't justify the continual, multi-million dollar increases in the city budget to support things like this. The vast majority of pools, and swim teams, are organized and paid for by private organizations such as homeowners associations. I am not in the position to argue that public pools do not offer added benefit--especially for lower income families--but is it worth spending our tax money to get this benefit?
Ask yourself that question when you pay your next property tax bill or parking ticket.
And, I would be remiss in my duty if I failed to mention my favorite Director/Department Head: Wayne Taylor. Mr Taylor went from making $12,600 as the Annapolis Ward 4 Alderman, to making $120,000+ (guestimate) as the Director of the Anne Arundel County Department of Aging. Again, I'm not saying that this department is useless, but the Department of Eternal Youth would be much more impressive!
It seems that the coach of the team, Jennifer Bistrack, is taking a job with the city later this summer as the Director of Health and Aquatics.
I did some research on this position operating under the following 2 assumptions:
1. this position is located in the Recreation and Parks Department
2. the funding for this position would be included in the FY 2007 budget
If the above are true, then we may have a problem. Although last year's rec & parks budget included requests for a horticulturist and a turf specialist, it made no mention of a Director of Health and Aquatics. How much does this person make, and where does the money come from?
But the real question is, do we really need this position? The city owns precisely 1 pool, right? Truxtun Park? Ok. Forgive me, but I just can't justify the continual, multi-million dollar increases in the city budget to support things like this. The vast majority of pools, and swim teams, are organized and paid for by private organizations such as homeowners associations. I am not in the position to argue that public pools do not offer added benefit--especially for lower income families--but is it worth spending our tax money to get this benefit?
Ask yourself that question when you pay your next property tax bill or parking ticket.
And, I would be remiss in my duty if I failed to mention my favorite Director/Department Head: Wayne Taylor. Mr Taylor went from making $12,600 as the Annapolis Ward 4 Alderman, to making $120,000+ (guestimate) as the Director of the Anne Arundel County Department of Aging. Again, I'm not saying that this department is useless, but the Department of Eternal Youth would be much more impressive!
Tuesday, August 7, 2007
Bonds (Municipal, Not Barry)
In this post, I will carefully traverse down the overgrown path that is the city's finances. The point of this somewhat torturous exercise is to properly analyze a recent story in The Capital concerning the city's pursuit of a triple-A (AAA) bond rating.
The city's budget is actually comprised of two parts: the operating budget and the capital budget.
Operating budget:
This is where most of the action happens. Money comes from property taxes, government transfers, fees, parking tickets, grants, and from a special tree in Ward 5 near where I live. (No, I will not tell you where the money tree is). Money is spent on all city business: mostly on salaries and benefits for city employees, but also on supplies, city expenses, etc.
Capital budget:
This is slightly harder to wrap your mind around because the city is not actually spending this money, at least not right away. The capital budget plans the spending for BIG projects: typically city expenditures of several millions of dollars, but sometimes as low as one hundred thousand dollars. The nature of these expenditures are not the day-to-day or recurring expenses of the city; rather, they tend to be one-time investments in infrastructure that are very expensive. For example, some capital projects for FY2008 are: building a recreation center, fixing a roof, and undergrounding electrical wires. If the city has extra money in the general fund, it pays for capital projects with that money. If not, the city issues bonds to raise money.
Now for the confusing part. The city will take in about $75 million this year. But, the capital budget calls for spending of $129 million, and that's not even including the operating budget spending (such as salaries for police).
How are the capital projects paid for? 3 ways:
1. operating fund money. some of the $75 million the city will take in goes to these projects, usually determined by #2 (read below)
2. state or federal money, which usually requires matching. so let's say a bridge costs $20 million and the state helps pay for it, but only with a 50% match. if they pay $1o million, the city must kick in their $10 million as well. this is how the amount of city operating budget money spent on capital projects is determined
3. if #1 and #2 are not enough, the city issues bonds to raise money
The bond process:
When the city issues bonds, it essentially is using a very high limit credit card--they are borrowing money just like we borrow money from the credit card companies when we use our credit cards. The difference is, we know the interest rate we will have to pay when we use our credit card, and the city does not know until after the transaction is made. Three characteristics of the bond issuance process determine the interest rate:
1: face value--the total amount of the bond(s) that the city is issuing
2. term--the amount of time that the city will take to repay the whoever buys the bond
3. sale price--the amount that the buyer of the bond pays for it
Let me try and illustrate an example. Let's say that the city of Annapolis needs $1 million to build a 24 karat gold statue of Al Hopkins, but they don't have the money to pay for it. They will, through a broker, sell a $1 million bond at auction. (For simplicity's sake we will say the term is 1 year.) People who would buy the bond are investors. The investors will never pay the face value of the bond....if they pay $1 million for the bond, and get paid back $1 million, they will have earned 0% interest on their money. If they paid only $950,000 for the $1 million bond, they will be paid back $50,000 on their $950,000 investment, or 5% return on investment. Since you can earn interest on savings accounts at banks, or on many other investments, you would never willingly earn 0% because you would be wasting an opportunity.
The amount of return (interest) that investors demand in exchange for lending their money depends on the risk of the investment. The safest investment that you can make is to buy a bond from the United States Treasury. The chance of the United States of America defaulting on bond payments is next to zero. There are infinite amounts of riskier investments you can make, but the important point is that Annapolis is on the safer side. While it cannot print money, and therefore is not as safe as a federal bond, the city of Annapolis is reasonably unlikely to default.
Which brings us to the rating system. Instead of a credit score like you and I get, governments (and corporations) are rated by 3 major rating agencies. The highest rating you can get is AAA. Annapolis has the next highest rating, AA+.
The theory is, if our rating improves to AAA, investors will see that Annapolis is very unlikely to default, and will be willing to bid a higher price for the bond, therefore lowering the interest rate the city has to pay and saving the taxpayers money.
As the case is, this won't matter much. According to Tim Elliot, the finance director, we never have problems selling bonds. Most bonds are bought immediately by brokers, who then sell the bonds to their clients. The price that we get for the bonds is near AAA level already.
So, in summary, it is noble to pursue a AAA rating, but not of extreme importance. It would save us a lot more money if the government didn't spend so much money so we didn't have to borrow so much money in the bond market, then would wouldn't have to pay that interest at all.
That's just about enough for this post. I am not bored with it, because I am an ECON geek, but I can see the looks on your faces. Email me if you would like more info.
The city's budget is actually comprised of two parts: the operating budget and the capital budget.
Operating budget:
This is where most of the action happens. Money comes from property taxes, government transfers, fees, parking tickets, grants, and from a special tree in Ward 5 near where I live. (No, I will not tell you where the money tree is). Money is spent on all city business: mostly on salaries and benefits for city employees, but also on supplies, city expenses, etc.
Capital budget:
This is slightly harder to wrap your mind around because the city is not actually spending this money, at least not right away. The capital budget plans the spending for BIG projects: typically city expenditures of several millions of dollars, but sometimes as low as one hundred thousand dollars. The nature of these expenditures are not the day-to-day or recurring expenses of the city; rather, they tend to be one-time investments in infrastructure that are very expensive. For example, some capital projects for FY2008 are: building a recreation center, fixing a roof, and undergrounding electrical wires. If the city has extra money in the general fund, it pays for capital projects with that money. If not, the city issues bonds to raise money.
Now for the confusing part. The city will take in about $75 million this year. But, the capital budget calls for spending of $129 million, and that's not even including the operating budget spending (such as salaries for police).
How are the capital projects paid for? 3 ways:
1. operating fund money. some of the $75 million the city will take in goes to these projects, usually determined by #2 (read below)
2. state or federal money, which usually requires matching. so let's say a bridge costs $20 million and the state helps pay for it, but only with a 50% match. if they pay $1o million, the city must kick in their $10 million as well. this is how the amount of city operating budget money spent on capital projects is determined
3. if #1 and #2 are not enough, the city issues bonds to raise money
The bond process:
When the city issues bonds, it essentially is using a very high limit credit card--they are borrowing money just like we borrow money from the credit card companies when we use our credit cards. The difference is, we know the interest rate we will have to pay when we use our credit card, and the city does not know until after the transaction is made. Three characteristics of the bond issuance process determine the interest rate:
1: face value--the total amount of the bond(s) that the city is issuing
2. term--the amount of time that the city will take to repay the whoever buys the bond
3. sale price--the amount that the buyer of the bond pays for it
Let me try and illustrate an example. Let's say that the city of Annapolis needs $1 million to build a 24 karat gold statue of Al Hopkins, but they don't have the money to pay for it. They will, through a broker, sell a $1 million bond at auction. (For simplicity's sake we will say the term is 1 year.) People who would buy the bond are investors. The investors will never pay the face value of the bond....if they pay $1 million for the bond, and get paid back $1 million, they will have earned 0% interest on their money. If they paid only $950,000 for the $1 million bond, they will be paid back $50,000 on their $950,000 investment, or 5% return on investment. Since you can earn interest on savings accounts at banks, or on many other investments, you would never willingly earn 0% because you would be wasting an opportunity.
The amount of return (interest) that investors demand in exchange for lending their money depends on the risk of the investment. The safest investment that you can make is to buy a bond from the United States Treasury. The chance of the United States of America defaulting on bond payments is next to zero. There are infinite amounts of riskier investments you can make, but the important point is that Annapolis is on the safer side. While it cannot print money, and therefore is not as safe as a federal bond, the city of Annapolis is reasonably unlikely to default.
Which brings us to the rating system. Instead of a credit score like you and I get, governments (and corporations) are rated by 3 major rating agencies. The highest rating you can get is AAA. Annapolis has the next highest rating, AA+.
The theory is, if our rating improves to AAA, investors will see that Annapolis is very unlikely to default, and will be willing to bid a higher price for the bond, therefore lowering the interest rate the city has to pay and saving the taxpayers money.
As the case is, this won't matter much. According to Tim Elliot, the finance director, we never have problems selling bonds. Most bonds are bought immediately by brokers, who then sell the bonds to their clients. The price that we get for the bonds is near AAA level already.
So, in summary, it is noble to pursue a AAA rating, but not of extreme importance. It would save us a lot more money if the government didn't spend so much money so we didn't have to borrow so much money in the bond market, then would wouldn't have to pay that interest at all.
That's just about enough for this post. I am not bored with it, because I am an ECON geek, but I can see the looks on your faces. Email me if you would like more info.
Monday, August 6, 2007
Development of Main Street: Un-Development of Our Bank Accounts
As you may have read, the city is anxious to get their hands on local and state tax dollars by participating in the Main Street Maryland program.
Here is a basic summary of how this program would work:
Annapolis would go through the competitve application process along with any other place that has a Main Street and wants to apply. The Division of Neighborhood Revitilization, a sub-agency of the Maryland Department of Housing and Community Development, would then select a winning applicant. The city selected would receive tax money to help do the following 4 things:
1. renovation: enhance physical appearance of buildings
2. organization: enhance consensus and cooperation among businesses and residents
3. promotion: sell the city
4. economic restructuring: I decided not to even try and paraphrase the stated purpose here. According the the program's web site, it means "Strengthening the district's existing economic base while finding ways to expand it to meet new opportunities and challenges from outlying development"
To assist my explanation of why this is bad even in principle, I will use a technique that I have not used before on this blog: a visual aid.
(40 minutes elapse)
Agghhh, the hell with it. Blogger will not upload my visual aid correctly, so if you want a visual aid that took me 5 minutes to create, and 35 minutes to try and format for uploading, please email me. If not, I will try to explain the problem using words.
Here we go. In the economy, accountability always follows spending. Let's say you go to a gas station because it is clean, has low prices, and has flavorful coffee in the morning. If they raise their prices and switch to instant coffee, you can go to a different gas station. This process works with almost any good or service, and the price system thereby provides incentive for businesses to operate at maximum efficiency.
Now let's look at this Main Street Maryland Program, and how it is paid for:
Step 1: You earn money.
Step 2: The state of Maryland and the city of Annapolis both impose taxes, and you lose a portion of your money.
Step 3: If Annapolis is chosen to participate in the program, the state gives the city some of the money it took from you to fund the program.
Step 4: The city of Annapolis uses the state's money, and its money--both of which are really your money--and invests it in one of the 4 things mentioned above.
So, in the case of a free market, your money goes from point A (you) to point B (anywhere you buy something), and if you don't like it, you can do something else.
For the Main Street Maryland Program, your money goes from point A, to point B, to point C, then point C invests YOUR money in a very few points D. And the worst part is points B and C are governments, which are notorious for waste.
The problems are:
1. Only some points D get the money, others do not. The government is discriminating against someone.
2. You may not want YOUR money going to the particular points D that the government decides are worthy.
3. These points D exist in a very small geographical area, in this case downtown Annapolis, yet are funded by tax money derived from tax-payers throughout the state of Maryland--many of which will never visit the new downtown that they paid for. Does this seem fair?
Sveinn Storm owns 2 businesses downtown, an ice cream parlor and a carry-out sandwich place, and would probably stand to benefit from this program.
(As a side note, Mr. Storm and I have crossed paths concerning 3 issues recently, and I am with him on 2 of those. Come to think of it, I support ice cream as a general principle, so make that 3 out of 4.)
Yet, he had this to say:
Here's a program where they say they will rejuvenate downtown and bring it to life. The fact of the matter is that it's already alive. A thriving downtown area - that we have. But to take taxpayer dollars for this program downtown is deceitful.
Here is a basic summary of how this program would work:
Annapolis would go through the competitve application process along with any other place that has a Main Street and wants to apply. The Division of Neighborhood Revitilization, a sub-agency of the Maryland Department of Housing and Community Development, would then select a winning applicant. The city selected would receive tax money to help do the following 4 things:
1. renovation: enhance physical appearance of buildings
2. organization: enhance consensus and cooperation among businesses and residents
3. promotion: sell the city
4. economic restructuring: I decided not to even try and paraphrase the stated purpose here. According the the program's web site, it means "Strengthening the district's existing economic base while finding ways to expand it to meet new opportunities and challenges from outlying development"
To assist my explanation of why this is bad even in principle, I will use a technique that I have not used before on this blog: a visual aid.
(40 minutes elapse)
Agghhh, the hell with it. Blogger will not upload my visual aid correctly, so if you want a visual aid that took me 5 minutes to create, and 35 minutes to try and format for uploading, please email me. If not, I will try to explain the problem using words.
Here we go. In the economy, accountability always follows spending. Let's say you go to a gas station because it is clean, has low prices, and has flavorful coffee in the morning. If they raise their prices and switch to instant coffee, you can go to a different gas station. This process works with almost any good or service, and the price system thereby provides incentive for businesses to operate at maximum efficiency.
Now let's look at this Main Street Maryland Program, and how it is paid for:
Step 1: You earn money.
Step 2: The state of Maryland and the city of Annapolis both impose taxes, and you lose a portion of your money.
Step 3: If Annapolis is chosen to participate in the program, the state gives the city some of the money it took from you to fund the program.
Step 4: The city of Annapolis uses the state's money, and its money--both of which are really your money--and invests it in one of the 4 things mentioned above.
So, in the case of a free market, your money goes from point A (you) to point B (anywhere you buy something), and if you don't like it, you can do something else.
For the Main Street Maryland Program, your money goes from point A, to point B, to point C, then point C invests YOUR money in a very few points D. And the worst part is points B and C are governments, which are notorious for waste.
The problems are:
1. Only some points D get the money, others do not. The government is discriminating against someone.
2. You may not want YOUR money going to the particular points D that the government decides are worthy.
3. These points D exist in a very small geographical area, in this case downtown Annapolis, yet are funded by tax money derived from tax-payers throughout the state of Maryland--many of which will never visit the new downtown that they paid for. Does this seem fair?
Sveinn Storm owns 2 businesses downtown, an ice cream parlor and a carry-out sandwich place, and would probably stand to benefit from this program.
(As a side note, Mr. Storm and I have crossed paths concerning 3 issues recently, and I am with him on 2 of those. Come to think of it, I support ice cream as a general principle, so make that 3 out of 4.)
Yet, he had this to say:
Here's a program where they say they will rejuvenate downtown and bring it to life. The fact of the matter is that it's already alive. A thriving downtown area - that we have. But to take taxpayer dollars for this program downtown is deceitful.
Agreed.
The goal of this program is to improve the downtown businesses so that they, and therefore the city, will make more money. But the glaringly obvious point is: if these businesses think they can make more money by doing something differently, they will do it on their own! If the government spends money where the private market does not, they are BY NECESSITY creating a negative market distortion, and causing deadweight loss. (Notable exception to this rule: public goods.)
Ignoring these facts, Kevin Baynes, director of the Office of Programs and Regional Development for the state, had this to say:
Downtown belongs to everybody.
He also said:
We want to bring people together for one common goal of bringing them back to downtown.
Mr Baynes, if and only if you can guarantee me that every taxpayer in the entire state of Maryland will visit downtown Annapolis in a manner exactly proportionate to the amount of their taxes that went to the project, then I will grant you that this is a proper goal for a government to have.
Mayor Moyer had this to say:
From my perspective, any time we can do a good job of selling ourselves and the additional needs we want to make happen, that's a plus.
Although I am typically astute when it comes to translating politicians' quotes into what they actually mean, I had to ponder a minute on this one. What I think the mayor meant to say here is:
"Rest assured, whenever we think we may be able to grow government, we will try."
The aforementioned Mr. Baynes then tried to calm our fears:
Mr. Baynes said that although many of the programs start off depending highly on government funding, it eventually evens out.
First of all, the last time I checked, money spent when a program 'starts off' is still our money. Second of all, how does it even out? Halfway through, does the government suddenly start mailing us refund checks? Third of all, these programs might never 'even out'--they may fail to generate any new business, thereby nullifying any benefits that we might have been entitled to.
So what about generating new business?:
In Westminster for example, $16 million has gone toward the revitalization from public and private partnerships, 295 new jobs have been created and 80 new businesses have opened since 1999, when it joined Main Street Maryland.
So what. Main Street Annapolis has generated jobs too--without the program. Amazing, you say, how is this possible??!!! Answer: THIS IS WHAT THE PRIVATE MARKET DOES, AND IT DOES THIS TASK BETTER THAN THE GOVERNMENT. I bet Annapolis has similar or better economic growth statistics, and that the program has marginal effect if any. Is this worth our tax money? ( Don't you try any funny business--this is a rhetorical question. Answer: no.)
The main philosophical argument on this issue is whether or not a city should be involved in selling itself. My position is in the negative. When cities sell themselves--A.K.A. undertake economic development--they are spending the money of the masses to benefit the few. More than that, such cites are competing; they are taking risks. Cities are not for-profit entities, nor are they privately funded--when cities try to do the function of the private market they are taking YOUR money and RISKING it on something that may or may not succeed. And even if they succeed 100% of the time (which would never happen), this still might not benefit you because you may not have a use for what the city has developed.
If the city is going to 'sell' something, maybe it should sell its soul to the devil in exchange for unlimited 2 am licenses--at least then we will have bought something that makes sense. (Ha! Didn't see that coming, did you? Talk to everyone soon!)
Back In Action
(Crossposted on Maryland Politics)
AP has been on a bit of an unplanned break recently, as he had to endure an accidental and catastrophic loss of the hard drive on his laptop. While trying to publish a business-related web site, I hit the wrong button and deleted everything, managing to devolve my computer back to its factory settings. But, with the help of some software CD's and a crafty Eastport businessman, I am up and running again.
And now to the business at hand. It seems that some fear-mongers have taken full advantage of the bridge collapse in Minnesota. Presented with the chance to propagandize the 'Doomsday' budget, state senator John Astle didn't disappoint, proclaiming in The Capital.......
I believe eventually we are going to have a crisis in Maryland.....Our (transportation money) is down, and eventually we are gong to have to close down some bridges because of safety concerns.
(This quote is verbatim. Memo to The Capital: good proofreading--"gong"?)
.......conveniently ignoring the fact that
officials said yesterday that .....these local bridges are safe.
To further detract from Mr. Astle's assertion, Mike Busch was quoted in the same article:
They are very expensive projects, and for the most part the federal government puts up the lion's share.
So, even if we have a doomsday budget problem--we don't, we have a spending problem--this should have minimal impact because the federal government pays the majority of the costs for roads.
Don't be fooled. The Democrats will have you believe that unless they raise taxes--a lot--our lives will be ruined. 'Our bridges will collapse, fires will go un-fought, police won't be able to keep up with crime, schools will turn away students', they will persuade. NOT TRUE.
Roads, bridges, fire, and police are some of the select few businesses that the government SHOULD be in. We need these things. What we do not need are Kent Island land deals, funding of pet projects, and increased government. The state should get its priorities straight, and spend our tax money on things everyone needs.
AP has been on a bit of an unplanned break recently, as he had to endure an accidental and catastrophic loss of the hard drive on his laptop. While trying to publish a business-related web site, I hit the wrong button and deleted everything, managing to devolve my computer back to its factory settings. But, with the help of some software CD's and a crafty Eastport businessman, I am up and running again.
And now to the business at hand. It seems that some fear-mongers have taken full advantage of the bridge collapse in Minnesota. Presented with the chance to propagandize the 'Doomsday' budget, state senator John Astle didn't disappoint, proclaiming in The Capital.......
I believe eventually we are going to have a crisis in Maryland.....Our (transportation money) is down, and eventually we are gong to have to close down some bridges because of safety concerns.
(This quote is verbatim. Memo to The Capital: good proofreading--"gong"?)
.......conveniently ignoring the fact that
officials said yesterday that .....these local bridges are safe.
To further detract from Mr. Astle's assertion, Mike Busch was quoted in the same article:
They are very expensive projects, and for the most part the federal government puts up the lion's share.
So, even if we have a doomsday budget problem--we don't, we have a spending problem--this should have minimal impact because the federal government pays the majority of the costs for roads.
Don't be fooled. The Democrats will have you believe that unless they raise taxes--a lot--our lives will be ruined. 'Our bridges will collapse, fires will go un-fought, police won't be able to keep up with crime, schools will turn away students', they will persuade. NOT TRUE.
Roads, bridges, fire, and police are some of the select few businesses that the government SHOULD be in. We need these things. What we do not need are Kent Island land deals, funding of pet projects, and increased government. The state should get its priorities straight, and spend our tax money on things everyone needs.
Friday, August 3, 2007
Crab Feast
The annual world's largest crab feast was held today at the Naval Academy Stadium, sponsored of course by the Rotary Club Of Annapolis. AP arrived 1 hour and 45 minutes prior to the 5 p.m start time, securing the 5th position in line. But, by the time all was said and done, myself and 2 of my cohorts were not quite in such an advanced position.
If you have not attended this event, it is worthwhile. For $50, you can get all-you-can-eat crabs, corn, soup, hot dogs, bourbon beef, and pulled pork. Also all you can-drink-beer. This year's crabs were a little small for my money...we are promised #1's, and some were barely legal if at all.
(For the international readers of this blog, #2 crabs (at least 5 inches in length from point to point) are the smallest crabs allowed to be caught, by law. #1's are the next size up. AP usually eats only monster crabs, which he frugally gets for $60 per dozen.)
Here is the top 10 list of things you will see at the Rotary Crab Feast, presented in reverse order for added drama:
10. A dunk tank.
9. 3000 people from all walks of life.
8. Fake Old Bay! (Boo!)
7. In a non-election year, 1 out of 10 people eating crabs will want your money or your vote.
6. In an election year, these people don't even stop to eat, they are too busy asking for your vote and your money.
5. People complaining about heat. Or rain. Or wind.
4. Every type of cookie you can think of....
3. But hurry, the Rice Krispie treats go quick!
2. Gambling for cakes. Weird.
1. Crabs!
Now, for some photo journalism from this year's feast:
Our spot in line.
The line.
The next generation of Hammonds in Annapolis.
The eating.
Hope to see you next year!
If you have not attended this event, it is worthwhile. For $50, you can get all-you-can-eat crabs, corn, soup, hot dogs, bourbon beef, and pulled pork. Also all you can-drink-beer. This year's crabs were a little small for my money...we are promised #1's, and some were barely legal if at all.
(For the international readers of this blog, #2 crabs (at least 5 inches in length from point to point) are the smallest crabs allowed to be caught, by law. #1's are the next size up. AP usually eats only monster crabs, which he frugally gets for $60 per dozen.)
Here is the top 10 list of things you will see at the Rotary Crab Feast, presented in reverse order for added drama:
10. A dunk tank.
9. 3000 people from all walks of life.
8. Fake Old Bay! (Boo!)
7. In a non-election year, 1 out of 10 people eating crabs will want your money or your vote.
6. In an election year, these people don't even stop to eat, they are too busy asking for your vote and your money.
5. People complaining about heat. Or rain. Or wind.
4. Every type of cookie you can think of....
3. But hurry, the Rice Krispie treats go quick!
2. Gambling for cakes. Weird.
1. Crabs!
Now, for some photo journalism from this year's feast:
Our spot in line.
The line.
The next generation of Hammonds in Annapolis.
The eating.
Hope to see you next year!
Thursday, August 2, 2007
Market House: A History
Yesterday somebody asked AP the history of the market house, with specific emphasis on the mayor's mistakes. In the 24 hours since this was posited, AP has determined 2 facts to be true:
1. For a foul-up of this magnitude, there is plenty of blame to go around.
2. I didn't know the history well enough.
So, I did some research with the intent of gaining a more complete understanding of the events that have brought us to where we are today. This post is meant to be an evolving one, so if you--the honorable citizen--have insight or can provide some context, email me and we can add to the story.
So here is the story as I know it to be:
History of the Process:
The market house has been around for a LONG time--over 300 years, with the current location existing since 1858--and has not been without controversy. Many have debated the proper use of the space, and several notable political attempts have been made to drastically alter, or even raze, the structure.
The current situation has its origins circa 2004. The city was the landlord of the market house property, and the leases of the tenants were due to expire. It was determined that the market house was in a state of disrepair, and needed to be renovated. The existing businesses, which were profitable by most accounts, failed to come together and present the city with a proposal to return to the space after it was renovated.
The Moyer administration then decided not to renew the leases of these tenants, opting instead to pursue an agreement with a New York based upscale grocer, Dean & Deluca. On March 21, 2005, the city announced that the market house would be operated by the joint interests of Dean and Deluca, and Annapolis Seafood. The only problem was that Dean & Deluca announced 5 months earlier that they would NOT be a part of the market house. According to their attorney:
On or about Nov. 9, 2004, Dane Neller, the CEO of Dean & DeLuca, advised representatives of the City of Annapolis that Dean & DeLuca would not be going forward with this transaction,"
He then elaborated:
Dean & DeLuca will not be joint venturing with Annapolis Seafood in the operation of the Market House," Dahlgren said. "This is absolutely not the case. Dean & DeLuca will not be a tenant of the Annapolis Market House nor have any interest in any entity which may ultimately become a tenant in the Annapolis Market House.
Fleetingly, the Moyer administration tried to cover its tracks. According to a Washington Post article on September 29,2005:
Agee and Moyer said they could find no record of the Nov. 9 communication referred to by Dahlgren.
If this is true, how do you explain the fact that:
On Nov. 10, one day after Dahlgren said Neller made it clear that Dean & DeLuca wasn't interested, three members of the city's negotiating team made train reservations to visit him in Manhattan.
Two of the people who went to this meeting were Emory Harrison, the then-director of central services, and Mike Miron, the then-and current-director of economic development. They were so disconcerted by the meeting that they recommended scrapping the deal. On December 8, 2005, Harrison sent an email to then-and current-city administrator Bob Agee, stating:
(We should be) placing the blame squarely on the shoulders of D&D....The City lived up to it's end of the deal, D&D did not.
Agee retorted.....
Am very optimistic things will be working out well...Do not know why we need to have notes flying about dealing emphasizing blame etc.
....apparently writing this email with his new pair of rose-colored glasses. Agee and Mayor Moyer continued in a state of denial, asserting that D & D's refusal to sign the lease was merely a negotiating tactic!! Agee and Moyer undertook a media effort--or propaganda campaign to use AP's preferred linguistic style--that tried to paint a pretty picture to the public. This less-than-accurate portrayal took its toll on the people who had to maintain the facade:
"What was that fairy tale about spinning straw into gold?" wrote city spokeswoman Jan Hardesty in an internal e-mail. "Rumblestiltskin? I'm beginning to feel that's my new role in life."
It was rumored that D & D was in danger of bankruptcy, and was on the verge of being acquired. Evidence seems to support the plausibility of this theory, as there were major changes to the management of D & D during this period.
As the Moyer administration began to accept that D & D was out, she tried to give the deal exclusively to Annapolis Seafood. But this was illegal, since D & D was the winning bidder for the property. The next proposed solution was to have D & D sign the lease, then turn over its interests to Annapolis Seafood. But several alderman rightly objected. It was then decided that the city would get out of the landlord business, and the lease to the property was given to the orginal runner-up bidder: Site Realty.
The Problem With the Result
There are 2 major areas of concern with the current site: design and content (tenants).
The first design flaw may just be my opinion, and it involves the layout. There are two main entrances, on either width of the building, that create a corridor for walking the length of the building and patronizing the shops. This single corridor is divided by chest-high counters through the middle of the aisle. The result is a capacity of about 3 people that can be in line at any given time at any given merchant. I'm no feng shui guru, but it seems to me that this could have been done better, perhaps with more than 2 doors.
The second design flaw is indisputable: the air conditioning. One of two things happened:
Either
1. the original engineer/contractor screwed up by installing an HVAC unit that is woefully inadequate
or
2. the original design was correct for the D & D plans, but the higher amount of heat produced by the current tenants required more power, and the result is an HVAC unit that is woefully inadequate
The world may never know who is to blame for this, but there are many aspects of the HVAC unit that are woeful. It is ugly, takes up parking spaces, still does not cool properly, and just the temporary unit costs the taxpayers multiple hundreds of thousands of dollars a year. The city wanted to use the same company to fix the HVAC that installed the first unit, and the bottom line is that while the mayor jet sets around the world, this is still not fixed.
The second problem is the tenants. Pretty much all commercial franchises. The aforementioned Emory Harrison was the person responsible for selecting from the 75 applicants:
When making his decisions, Harrison "tried to keep the market's product distribution in line with the goods and services that the public would want. For example, there will be no crafts or tee shirt shops," he says.
Is this really what the public wants? A food court? What data do you have that supports this? Promising some semblance of a market, Mr. Harrison remarked:
There will also be some seasonal outdoor vendors under the eaves of the Market House...selling fresh fruits, vegetables, and flowers, but not in the plaza area....The city will be giving preference to local farmers.
If this has happened, I have yet to see it.
Who Can I Blame?
Frankly, everyone. As my friend http://www.annapoliscapitalpunishment.blogspot.com/ pointed out, something so big and so wrong cannot be achieved by one person. My personal opinion is that the person at the top has to take responsibility. We are not talking about construction problems or technical oversights; this project suffered from a lack of strategic vision, poor and divided leadership, poor oversight, a failure to address the facts, and apparent unwillingness to assess and provide for the actual wishes of the public. If you ask me, Mayor Moyer is at fault. But, here is a list of others who can share in that blame, and why.
-Mayor Moyer: with great power comes great responsibility.
-Bob Agee: conspirator in effort to ignore facts and mislead public
-D & D: for starting negotiations they could not finish
-Emory Harrison: for selecting the tenants
-the HVAC conglomerate: for messing up the air conditioning
-the old tenants: for failing to unify and preserve/improve the market house
-you and me: for allowing the mayor to be re-elected in the middle of all of this
So, What Now?
We have to accept that the market house is what it is. We have to fix the air conditioning, and restore the market house to a central, attractive city fixture (or at least as close as it can get). After that, the rest is up to the consumers. If we like the market house--if we find it useful--we can go there. If we like it enough that it is profitable, it will stay there. If not, businesses will start leaving, and the city will have to go through this again. Hopefully by that time we can decide what we want our market house to be.
1. For a foul-up of this magnitude, there is plenty of blame to go around.
2. I didn't know the history well enough.
So, I did some research with the intent of gaining a more complete understanding of the events that have brought us to where we are today. This post is meant to be an evolving one, so if you--the honorable citizen--have insight or can provide some context, email me and we can add to the story.
So here is the story as I know it to be:
History of the Process:
The market house has been around for a LONG time--over 300 years, with the current location existing since 1858--and has not been without controversy. Many have debated the proper use of the space, and several notable political attempts have been made to drastically alter, or even raze, the structure.
The current situation has its origins circa 2004. The city was the landlord of the market house property, and the leases of the tenants were due to expire. It was determined that the market house was in a state of disrepair, and needed to be renovated. The existing businesses, which were profitable by most accounts, failed to come together and present the city with a proposal to return to the space after it was renovated.
The Moyer administration then decided not to renew the leases of these tenants, opting instead to pursue an agreement with a New York based upscale grocer, Dean & Deluca. On March 21, 2005, the city announced that the market house would be operated by the joint interests of Dean and Deluca, and Annapolis Seafood. The only problem was that Dean & Deluca announced 5 months earlier that they would NOT be a part of the market house. According to their attorney:
On or about Nov. 9, 2004, Dane Neller, the CEO of Dean & DeLuca, advised representatives of the City of Annapolis that Dean & DeLuca would not be going forward with this transaction,"
He then elaborated:
Dean & DeLuca will not be joint venturing with Annapolis Seafood in the operation of the Market House," Dahlgren said. "This is absolutely not the case. Dean & DeLuca will not be a tenant of the Annapolis Market House nor have any interest in any entity which may ultimately become a tenant in the Annapolis Market House.
Fleetingly, the Moyer administration tried to cover its tracks. According to a Washington Post article on September 29,2005:
Agee and Moyer said they could find no record of the Nov. 9 communication referred to by Dahlgren.
If this is true, how do you explain the fact that:
On Nov. 10, one day after Dahlgren said Neller made it clear that Dean & DeLuca wasn't interested, three members of the city's negotiating team made train reservations to visit him in Manhattan.
Two of the people who went to this meeting were Emory Harrison, the then-director of central services, and Mike Miron, the then-and current-director of economic development. They were so disconcerted by the meeting that they recommended scrapping the deal. On December 8, 2005, Harrison sent an email to then-and current-city administrator Bob Agee, stating:
(We should be) placing the blame squarely on the shoulders of D&D....The City lived up to it's end of the deal, D&D did not.
Agee retorted.....
Am very optimistic things will be working out well...Do not know why we need to have notes flying about dealing emphasizing blame etc.
....apparently writing this email with his new pair of rose-colored glasses. Agee and Mayor Moyer continued in a state of denial, asserting that D & D's refusal to sign the lease was merely a negotiating tactic!! Agee and Moyer undertook a media effort--or propaganda campaign to use AP's preferred linguistic style--that tried to paint a pretty picture to the public. This less-than-accurate portrayal took its toll on the people who had to maintain the facade:
"What was that fairy tale about spinning straw into gold?" wrote city spokeswoman Jan Hardesty in an internal e-mail. "Rumblestiltskin? I'm beginning to feel that's my new role in life."
It was rumored that D & D was in danger of bankruptcy, and was on the verge of being acquired. Evidence seems to support the plausibility of this theory, as there were major changes to the management of D & D during this period.
As the Moyer administration began to accept that D & D was out, she tried to give the deal exclusively to Annapolis Seafood. But this was illegal, since D & D was the winning bidder for the property. The next proposed solution was to have D & D sign the lease, then turn over its interests to Annapolis Seafood. But several alderman rightly objected. It was then decided that the city would get out of the landlord business, and the lease to the property was given to the orginal runner-up bidder: Site Realty.
The Problem With the Result
There are 2 major areas of concern with the current site: design and content (tenants).
The first design flaw may just be my opinion, and it involves the layout. There are two main entrances, on either width of the building, that create a corridor for walking the length of the building and patronizing the shops. This single corridor is divided by chest-high counters through the middle of the aisle. The result is a capacity of about 3 people that can be in line at any given time at any given merchant. I'm no feng shui guru, but it seems to me that this could have been done better, perhaps with more than 2 doors.
The second design flaw is indisputable: the air conditioning. One of two things happened:
Either
1. the original engineer/contractor screwed up by installing an HVAC unit that is woefully inadequate
or
2. the original design was correct for the D & D plans, but the higher amount of heat produced by the current tenants required more power, and the result is an HVAC unit that is woefully inadequate
The world may never know who is to blame for this, but there are many aspects of the HVAC unit that are woeful. It is ugly, takes up parking spaces, still does not cool properly, and just the temporary unit costs the taxpayers multiple hundreds of thousands of dollars a year. The city wanted to use the same company to fix the HVAC that installed the first unit, and the bottom line is that while the mayor jet sets around the world, this is still not fixed.
The second problem is the tenants. Pretty much all commercial franchises. The aforementioned Emory Harrison was the person responsible for selecting from the 75 applicants:
When making his decisions, Harrison "tried to keep the market's product distribution in line with the goods and services that the public would want. For example, there will be no crafts or tee shirt shops," he says.
Is this really what the public wants? A food court? What data do you have that supports this? Promising some semblance of a market, Mr. Harrison remarked:
There will also be some seasonal outdoor vendors under the eaves of the Market House...selling fresh fruits, vegetables, and flowers, but not in the plaza area....The city will be giving preference to local farmers.
If this has happened, I have yet to see it.
Who Can I Blame?
Frankly, everyone. As my friend http://www.annapoliscapitalpunishment.blogspot.com/ pointed out, something so big and so wrong cannot be achieved by one person. My personal opinion is that the person at the top has to take responsibility. We are not talking about construction problems or technical oversights; this project suffered from a lack of strategic vision, poor and divided leadership, poor oversight, a failure to address the facts, and apparent unwillingness to assess and provide for the actual wishes of the public. If you ask me, Mayor Moyer is at fault. But, here is a list of others who can share in that blame, and why.
-Mayor Moyer: with great power comes great responsibility.
-Bob Agee: conspirator in effort to ignore facts and mislead public
-D & D: for starting negotiations they could not finish
-Emory Harrison: for selecting the tenants
-the HVAC conglomerate: for messing up the air conditioning
-the old tenants: for failing to unify and preserve/improve the market house
-you and me: for allowing the mayor to be re-elected in the middle of all of this
So, What Now?
We have to accept that the market house is what it is. We have to fix the air conditioning, and restore the market house to a central, attractive city fixture (or at least as close as it can get). After that, the rest is up to the consumers. If we like the market house--if we find it useful--we can go there. If we like it enough that it is profitable, it will stay there. If not, businesses will start leaving, and the city will have to go through this again. Hopefully by that time we can decide what we want our market house to be.
Wednesday, August 1, 2007
We Have a Right To Know
(Crossposted on Maryland Politics)
The Capital recently published a list of the county's >$100,000 salaries, with the names of the people who receive them. Since then, there has been nothing less than a barrage of letters to the editor from people claiming that this was an improper invasion of the privacy of those people.
Let me quote from one of those letter writers, Karen Cropper of Severna Park, who basically says what everyone else has been saying:
To disclose their names for thousands of readers to see was an invasion of their privacy.
This statement worries me, and I'll tell you why. So many people seem to perceive some type of disconnect from their money and money that governments spend. If you were to own a business, wouldn't you make sure your employees are doing what you want? You are paying them, after all. Well, the county is the same way. WE pay all of the salaries for government employees, and we have a right to know what they are. We even have a right to know the names associated with the salaries, so if we believe that a particular employee is deficient or wasting OUR MONEY, we can use proper channels to do something about it.
These salaries are on the public record.
Yes they are. In fact, I called the county, and after being told to hold 5 times (the first person who I talked to said the information was not a matter of public record, so I persisted) I was finally transferred to Andrea Fulton, the county Personnel Officer. She confirmed that this information was covered by the public information act, and if you sent a written or email request, they would furnish the information within 30 days as required by law. I spoke with Erin Cox, the reporter that wrote this story, and she said all she did was call the county and ask for a list of everybody who made more than $100,000. So what's the big deal if The Capital published this information? If you ask me, they did us a favor by taking the time to do this research.
However, most members of the general public would not seek out the names of these people.
The Capital recently published a list of the county's >$100,000 salaries, with the names of the people who receive them. Since then, there has been nothing less than a barrage of letters to the editor from people claiming that this was an improper invasion of the privacy of those people.
Let me quote from one of those letter writers, Karen Cropper of Severna Park, who basically says what everyone else has been saying:
To disclose their names for thousands of readers to see was an invasion of their privacy.
This statement worries me, and I'll tell you why. So many people seem to perceive some type of disconnect from their money and money that governments spend. If you were to own a business, wouldn't you make sure your employees are doing what you want? You are paying them, after all. Well, the county is the same way. WE pay all of the salaries for government employees, and we have a right to know what they are. We even have a right to know the names associated with the salaries, so if we believe that a particular employee is deficient or wasting OUR MONEY, we can use proper channels to do something about it.
These salaries are on the public record.
Yes they are. In fact, I called the county, and after being told to hold 5 times (the first person who I talked to said the information was not a matter of public record, so I persisted) I was finally transferred to Andrea Fulton, the county Personnel Officer. She confirmed that this information was covered by the public information act, and if you sent a written or email request, they would furnish the information within 30 days as required by law. I spoke with Erin Cox, the reporter that wrote this story, and she said all she did was call the county and ask for a list of everybody who made more than $100,000. So what's the big deal if The Capital published this information? If you ask me, they did us a favor by taking the time to do this research.
However, most members of the general public would not seek out the names of these people.
That's because most people are too lazy or don't care enough. The fact is, we can if we want to. Another fact is, we have a right to do this because we pay these people to govern our lives.
Would a private company have given out this information?
Does private company = public government?
It would have been sufficient to disclose the number of principals, assistants, county firefighters, and others who make that amount of money.
No.....no it wouldn't have. These government employees--the ones that make over $100,000--affect our lives as much, if not more, than the elected officials. They pick the teachers that teach our kids, they draw up the budget that spends our tax dollars, they are the heads of the departments that make up the entirety of our government. We need to know who these people are so we can determine if they are worth our expense.
In the case of firefighters' overtime, the fact that we knew this information led to a fourth shift of firefighters, a consequent reduction in overtime, and the first fire department budget that has not been exceeded since fire was discovered. (Note: exaggeration.)
Bottom line: we have a right to know because it's our money, and the more you know--the more good things happen.
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