Last week, a press release sent out by the Chamber - and endorsed by me - listed Councilor Reinert as someone who declined an invitation to appear at the FORVM on Tuesday, January 8, 2007 at 8:00 AM. Councilor Reinert expressed his disappointment in seeing his name listed among others who also declined the invitation to participate in our discussion about the utility rate increases.

At tomorrow's FORVM, we will be discussing the utility rate increases. Clearly, the Chamber is concerned that recent rate increases are too high and that our support to raise the rates - as part of the solution to solve the retiree health care crisis - is being taken advantage of. Our rates for gas and water are now some of the most expensive in Minnesota, and, perhaps, some of the most expensive in the entire upper Midwest. Add rate increases to recently announced property tax increases, and it is not hard to see that government is starting to consume a large proportion of the available air, making it difficult to breath for those on a limited income and for businesses who cannot easily pass along those costs.

Reinert's dissatisfaction with being listed in the press release is not entirely off base, as it may look like he's trying to duck the issue. We know, however, that this is not the case. Yet, we still believe the city should have made a better case for increasing rates - or at least the increased portion of the higher rates that went to operations. If it seems we unfairly singled out Councilor Reinert, we apologize.

We also invited Jim Benning, director of public works, to participate in Tuesday's discussion at the FORVM. As the director of public works, Mr. Benning is intimately involved in setting rates and controlling costs within these departments. We were disappointed that Mr. Benning declined our invitation to participate, citing building safety official Duane Lasley's previous experience as reason to not attend.

To be sure, Mr. Lasley faced an angry crowd, comprised of contractors, architects, business owners, and citizens alike. Members of the crowd felt that they suffered silently for some time, and saw the FORVM as the perfect opportunity to voice their opinions publicly. Those who offered their opinions were direct. Nobody was disrespectful. Mr. Lasley got into trouble when he lost his temper and displayed gruff behavior. Given a "do over," we can all be sure he would have acted more politely. This, however, does not excuse highly paid city staff from addressing those who want an explanation as to why they are paying the highest rates for utilities in the State of Minnesota.

We hope that you will attend the FORVM. It is time we ask government to justify their increased costs. After all, business owners and operators, in the form of competition, have to justify their costs or risk having their customers spend their dollars elsewhere.

I wish to thank Mr. Reinert for the courage and forthrightness to address his concerns directly and encourage him to do so in the future. Unless we can talk forthrightly as citizens to our appointed and elected officials, how can we expect government to do anything but pass along higher costs and be told simply that it comes with the territory?

Attend the FORVM tomorrow, Tuesday, January 8, at 8:00am, and have your voice heard.

The FORVM
Tuesday, January 8
8:00am - 9:00am
Playground Theatre - Tech Village, First Floor

Every once in a while, it's good to be reminded of an old adage: "Fool me once, shame on you. Fool me twice, shame on me." The fourteen point city council task force recommendation to solve the city retiree health care crisis was released nearly two years ago. The report was hailed as great work and endorsed by all. And when I say all, I mean all, including AFSCME. Somebody ought to remind the leadership of AFSCME that, along with the Chamber, they endorsed the report.

Knowing full well that member businesses would feel real pain, the Chamber's board of directors passed a resolution that supported the ensuing tax and utility rate increases, as dictated by the task force recommendations. While the taxes were not immediately raised, utility rates increased significantly.

Yet AFSCME leaders continue to exploit the situation, now claiming that employees have the right to work without any reduction in hours - even when city finances might be in crisis or there is no work to be done. And the rest of us continue to feel significant pain. Shame on us if we let AFSCME get away with such a gross abuse of its stronghold.

What business would employ workers if there was no work? Who gets a job for life? When business falls off, most companies lay off workers. Seemingly, the only people with such benefits are American auto workers and employees at the City of Duluth. History has shown that this model has not worked too well for the car companies; and it will not work too well for the city of Duluth either.

You should be outraged that your business will certainly face higher taxes, utility rates, and fees, while, at the same time, city services will be reduced. While you adjust your bottom line downward to accommodate the added expenses, AFSCME leaders will continue to rally their members to say the city is unfair because employee hours should not be reduced unless workers want them to be reduced.

On Monday night, November 19, the city council will meet to vote on the contract, regardless if the rank and file union member has approved the contract. This is a good thing. If the contract passes, union leaders will be forced into a situation wherein they will have to let their members vote. Effectively the vote will bring the situation to fruition - we will know if AFSCME is part of the solution or the problem. We need to hold AFSCME accountable for their promises. If we don't, we'll only have ourselves to shame.

Email the city council at council@duluthmn.gov to tell them to vote in favor of the contract.

Enough is enough. If our "partners" (AFSCME) in this challenge are not willing to come to the table, please lock them out and hire someone who will. The future of the entire city is on the line, not just that of a few.

The Chamber wants its employees to think and act innovatively. The best case scenario for the Chamber is to lose an employee because he or she started his or her own business. That said, the Chamber does not support employees who use their positions to further their own personal businesses, especially when done at the expense of a member business. Should an employee start a business, he or she ought to work the business on personal time and private property.

Enough said.

The City of Duluth, however, is somewhat different. The fire department has a non-profit working within one of its buildings that competes directly with many small businesses in our region. This business is Fireman’s Mutual Aid (FMA), a thinly disguised altruistic organization that works within the fire department and uses every competitive advantage it can to sell its products to the city and to private business. According to documents received in our office, FMA allegedly pays no rent, no utility bills, and when selling their services, representatives can wear their City of Duluth Fire Department uniforms. Certainly, any small business would envy such advantages.

Although the arrangement between the fire department and Fireman’s Mutual can be considered somewhat altruistic – because the FMA donates a portion of its monies to charitable organizations – the situation actually hurts both the city and private business. Government is hurt because this kind of arrangement damages the business climate. When word of such operations gets around, notions that Duluth is a difficult place in which to do business and that certain parties get special privileges are reinforced. Arrangements such as the one between the fire department and FMA, can lead to corruption and insider trading. Tax collections are also affected – when businesses face unfair obstacles they are less able to expand and pay fewer taxes.

The negative effects arrangements such as the one described have on business are glaring. When private business has to compete with a quasi government organization, it has less to invest in maintenance, hiring, and expansion. It would be no different than a malnourished man entering a sumo wrestling contest – the contest is weighted on the wrong side of the ring.

Government employees have a role to play in our society and we have an obligation to pay them accordingly. They do not have the right to exploit publicly owned assets – the good reputation and physical properties of the fire department - to run a privately held company to the disadvantage of locally owned and operated small businesses.

You should be concerned. The city ought to root out such injustices. They ought to call in an independent auditor/investigator to set things straight. They should end the practice of allowing government to compete with small businesses.

You should act – both mayoral candidates and all the city council candidates have indicated they want to do what is right for our city. Ask each and every one of them what they would do to right this situation. It is our duty to you, as our member, to bring this situation to your attention. It is our collective duty to act. Unless we do, Duluth will continue to have an anti-business reputation and small locally owned business will continue to face unfair competitive advantages from the very government we pay taxes to fund.

A recent Democracy Corps poll found that 83% of people believe that if government had more money it would probably waste it. Clearly, anti - government sentiment is alive and well.

Last week, both WDIO TV and the Duluth News Tribune reported that the City of Duluth Building Inspection department was behind plan review (the process that leads to one getting a building permit) by about six weeks. Ideally, this process should take about one week. This backup in the Building Inspection department recently led one company to issue layoff notices to ten workers. Layoffs for this reason - a backup at City Hall - are reprehensible and unacceptable. Mayor Bergson stated the department needs more help, but he is reluctant to add employees because of legacy costs (lifetime health care) associated with hiring new staff. The American Federation of State, County and Municipal Employees Union (AFSCME) countered that such costs are already cut out of any labor agreements. Both miss the point.

If the aforementioned poll is any indication of how people feel in Duluth, and there is no indication that Duluthians feel differently than other American citizens, spending additional money, in any case, to hire more people may not solve the problem. An overhaul is needed.

To be clear, the employees in the Building Inspection department are doing their best. After all, it is their duty to rightfully perform their tasks as prescribed under current arrangements. However, the problems of the department will not soon go away unless there is political leadership that empowers the department and its staff to radically alter itself. This, undoubtedly, will be difficult.

Mayor Bergson is correct that the some of the current contracts are onerous. AFSCME, as a representative of the employees, is correct that more employees are needed. However, both sides will need to come to the agreement that a more flexible arrangement will have to be adopted before any change can come about. Safety of buildings needs to be foremost. This means Building Inspection may have to reward its employees for performance rather than tenure. Additionally, our political leaders will have to bring zoning codes and regulations out of the dark ages and into the new millennium. When these two things occur, the underlying issues of building inspection will be resolved.

In this election season, it is our duty to point out problems that the business community faces. This particular issue has been around for a very long time. It is time we start demanding real solutions to real problems, regardless of the potential political fallout. Once this particular problem is finally resolved, not only will ten employees at Women in Construction have job security, but the whole city will be better off. Government has the power and the ability to convince skeptical taxpayers that they will be responsible stewards of revenue. Let's hope in this particular case they are successful - sooner rather than later.

You can help. Challenge candidates running for city council and mayor to explain what they will do to address and bring resolution to the chronic problems of the City Building Inspection department.

So now we have it. We finally know who is running for mayor, city council, and the school board. Personally, I am glad that people want these jobs, especially considering that governing is often less appealing once one is elected. That said, we need good candidates whose views reflect the values of the majority rather than narrow special interests.

Unfortunately, elections in our fair city often represent much narrower views. To get AFSCME's endorsement means that you must, if elected, vote according to their dictums. This was demonstrated at city hall last winter, when the council voted to adopt the "Card Check Neutrality Agreement" clause for any new hotel or restaurant that might get city money. The thunderous echo was felt not in the need or wants to clamp down on public finance to private business, but in response to the arrogant manner in which the leader of the Central Labor Body in Duluth called in his votes. Simply put: he called out those councilors who had pledged to support their agenda in exchange for union endorsement in their previous campaigns. Six of the nine councilors dutifully voted as instructed.

One has to ask if the votes collected that evening really contributed to the betterment of Duluth. Let it be known that I and the Chamber's leadership believe economic development is better served by creating a better business climate than by handing out public cash. That stated, and regardless of the way one looks at this particular issue, our local electoral system is too dependent upon which team can gear up and get their candidate elected - which leads to the kind of governing and public policy outlined above.

Rather than assume we know your business, your values, or that you want us to narrowly define candidates for public office, we are committing to drawing out the candidates' platforms, ideas, and philosophies. We will emphasize business climate, economic development, and good governance with the candidates. Once we gather the information, we'll forward it on to you so you can use it to make an informed decision at the ballot box.

Watch our emails and publications for opportunities to give feedback, take straw polls (non-scientific opinion surveys), and to hear and meet the candidates. Finally, look for the two special election pull out sections in the October and November issues of the Xpress.

According to a recent Gallop Survey nine out of ten citizens in American are happy with their opportunity to economically succeed. If that is truly the case, those running for elected office in Duluth should take note. As a result, they should tailor their political platforms to make sure Duluthians have the same economic opportunities reported by other Americans. If the candidates - our future leaders - fail to collectively emphasize financial success in this election, look to have the union collect enough votes to pass something that benefits a small number of their members at a great disadvantage to the citizens at large.

Social pressure plays a significant role in dictating human behavior. To be sure, this is the force that keeps us driving at or just above the speed limit. It is the thing that makes us all drive on the right side of the road. As such, governments pass laws that help formalize social pressure. Often those laws tell us what we already know: murder, stealing, swindle and so forth are intrinsically wrong.

One such issue that NYC has experience with, for example, is that of alcohol regulation. NYC’s huge public events, large population, and numerous establishments that sell alcohol demand thorough and well thought out laws. One such item Duluth ought to take note of is that NYC allows - and even promotes - the sale of alcohol at three different restaurants within Central Park. You can buy liquor within the park at the Loeb Boathouse, Sheep Meadow Café, or at the Tavern on the Green.

NYC has learned that simply restricting the sale of alcohol to certain areas does not lessen the problems associated with alcohol.

I am not trying to argue that alcohol does not cause problems. Clearly, there are too many alcohol related deaths on our highways. Yet, according to the Minneapolis Star Tribune’s March 18, 2007 editorial, “Don’t Start or Stop with Grocer Wine Sales,” alcohol related problems are not solved by the restriction of alcohol sales – this is the remaining lesson of Prohibition. Apparently NYC has taken this to heart by allowing and even promoting the sale of alcohol within Central Park. Seemingly, teenagers and children playing in and nearby Central Park have been neither harmed nor suffered alarmingly higher rates of alcoholism.

Councilor Krause should take notice. He is the single vote standing in the way eliminating Prohibition era language in our Duluth city charter. Although merit can be found in councilor Krause’s concern about the effects of alcohol abuse, allowing this newly discovered language to stand in the City Charter will only harm Duluth. Unless Krause votes with the council on March 26th to eliminate the language from the Charter, Duluthians could see the potential closure of any establishment that sells or serves liquor if it is near parkland. This includes bars, restaurants, or liquor stores nearby the Lakewalk, Canal Park, and even those in the vicinity of Memorial Park in West Duluth.

A no vote by Councilor Krause would allow the language to stand and would result in several things. First, our city attorney’s office will have to search all city property deeds and review city council minutes back to 1912 to establish if they are deemed “parkland.” Second, any liquor selling establishment deeming to be in violation would lose its license. Lastly, Duluth
would get another black eye, thereby reinforcing the notion that Duluth is “anti-business.”

Councilor Krause favors sending the Charter language back to the Commission for language
revision. However, the Charter Commission voted unanimously to remove the language. Even former Police Chief and Charter Commission member Eli Miletich voted in favor of eliminating the prohibition era language. The overall sentiment of the commission is that the current language is outdated, onerous, unnecessary, and anti-business. If Councilor Krause thinks the commission favors his prohibition era anti-business suggestion, he ought to reconsider.

Enough is enough. Duluth is already combating an anti-business reputation. It is time the citizens, in a show of solidarity, gather to support local business.

We invite you to participate: On Wednesday, March 21 at 10:30 AM, the Chamber, along with members of the hospitality industry, will hold a press conference at Grandma’s in Canal Park (this is one of the businesses that could be badly hurt). If you are tired of city hall standing in the way of business come to Grandma’s Saloon, located at 522 South Lake Avenue, to show your support for the business owners and all the men and women who work in those businesses. Without your support many of them may have to lay off employees or close their doors.

Feel free to forward this email on to anybody who has a stake in what is happening in Duluth. As well, email Councilor Krause and let him know that you support the many local businesses his vote will hurt. His email is gkrause@ci.duluth.mn.us

Click Here to view the business issues regarding the City of Duluth Charter language.

Creating a better business climate is easy: it simply means providing a level playing field; having fair and honest competition; keeping taxation as low as possible; and minimizing red tape and regulation. When those elements are in place, business thrives.

Unfortunately, business in Duluth is often challenged when this simple formula is compromised. On Monday night, the Duluth City Council will once again take up a resolution fraught with the potential of eroding the business climate at once. This will take place when the Charter Commission’s* recommendation to strike a 1912 Prohibition era liquor regulation from the city charter is approved by the City Council.

This is highlighted by the case of a new restaurant that wants to serve liquor. Unfortunately, the restaurant in question – a newly renovated business on Fourth Street near Chester Creek – is unable to attain a license to serve liquor because it is within a short distance of a park. In keeping with the prohibition laws of the 1910s to the early 1930s, the city charter forbids this to happen. Since this time, our city has progressed forward creating more modern controls: the City of Duluth Alcohol, Gaming, and Tobacco Commission and the City Council, for example. Moreover, there are also state laws and regulations that also control how the city controls liquor distribution, liquor sales, and so forth.

Because this is a charter change, its approval requires a unanimous vote of the city council. The change would effectively strip the prohibition era regulation from the charter and lessen a regulatory burden. Still, our city would maintain good control over liquor provided by the previously mentioned commission, elected officials, and state laws. Charter change, in this case, would improve the business climate – something our city desperately needs.

City Councilor Garry Krause stands in firm opposition. To be fair, councilor Krause is concerned that the establishment of another liquor serving restaurant in this particular neighborhood may be a cause for delinquency among college students. He does not want further alcohol related incidents. He believes the city council to be weak in the knees when it comes to liquor regulations and violation of those regulations in the City of Duluth. Keeping one more layer of Prohibition Era regulation, he reasons, will help protect the citizenry.

There are several problems with Krause’s argument. First, if we keep the 1912 Prohibition Era Charter regulation, the City of Duluth will have to research all park, parkland, or city property deeds to see if any liquor serving or selling establishment is near parkland. This could potentially take several thousand hours of city attorney time and effort, thereby taking time away from economic development projects and so forth. Keeping the 1912 regulation will also force a review of all city council meeting minutes to see how any city owned parcel of land was bought or accepted as city land to make sure the intention of the acquired property was to be parkland or any other kind of property. This could potentially snare unintended businesses such as those in Canal Park, those close to city hall, or even those in West Duluth that are close to Memorial Park.

Secondly, the 1912 era provision in our charter does not reflect modern realities. Eliminating the ability to of someone to attain liquor from a legal and licensed source wherein an invested proprietor can be penalized will not reduce alcohol abuse by college students. College students often times gain access to alcohol at house parties when an irresponsible adult provides it for a fee. Councilor Krause is correct that this kind of behavior ought to be stopped. His argument falls short when he thinks a proprietor, properly licensed and rightly regulated, would risk his license to provide alcohol to underage customers. The real solution, then, is to remove this antiquated provision and allow our licenses to be governed by one, straight-forward code.

We need your help. Councilor Krause indicates that he is acting in accord with constituent wishes. To help our city avoid another potentially damaging and expensive public fight, please contact Councilor Krause to voice your concern that we have straightforward, simple, and effective regulation of alcohol in our city. In doing so, you will help us begin to create a better business climate.

Email councilor Krause at gkrause@ci.duluth.mn.us and respectfully ask him to vote in favor of 07-007-O