Andy's Blog

Recently I bought a pair of blue jeans. The cost - $16.50. Sure they aren't designer blue jeans, but nonetheless, they look good when I wear them. What strikes me is that they only cost $16.50; clearly less than the $25.00 jeans I bought from "Sons of Britches" in 1975.

I attribute this directly to competition, which keeps costs down, drives innovation and makes our lives better. It is the American way and I fully embrace it. The Chamber of Commerce Board of Directors embraces it too. They unanimously endorsed it as a one of our key values. Private enterprise, then, ought to do as much as possible leaving government to do only the things that private enterprise cannot.

Aside from knowing a bit about how I think or what the Chamber values, we, as a community, have an opportunity to foster a little competition. Currently, and for all practical matters, only Delta Airlines serves Duluth. While Delta is a great carrier, wouldn't it be great to have some competition that might make our fares go down and our service go up?

Duluth's Airport Director, Brian Ryks, is seeking a Small Community Air Service Development Program grant for $600,000. The grant, if obtained, will help enhance air service in Northeastern Minnesota and Northwestern Wisconsin. Essentially it will allow travelers an ability to fly directly to Chicago. By doing so, competition will drive down prices and allow business and leisure travelers more options.

You can help make this happen. Attached is a sample letter that you could fill out and send along showing your support. The process is easy. Simply download this attachment, fill it out and email it, in PDF format, to the following email addresses: jack@sixelconsulting.com and bryks@duluthairport.com. Brian Ryks will handle it from there. It only takes a few moments. The deadline to send your letter is: Friday August 21, 2009.

This is the best kind of stimulus program. The grant is limited in length and will help private business compete. At the end of the day, we all benefit. Wouldn't it be great to have lower fares and better service?Now if I could only fit in the same size jeans that I wore in 1975 - and by the way, those jeans were waist size 24. Oh my.

A good friend of mine is always quick to say, “I will do some research on the internet.” I always cringe when I hear it. One does not do research on the Internet. One looks up information – in a variety of different formats – on the Internet. Research is done in laboratories, classrooms and in places like the Natural Resources and Research Institute. Research is not posted on the Internet. When we do “research on the internet,” we cheapen the value of real information.

Nowhere is this more evident than in politics and policy. Having been through one of the most grueling senatorial campaigns in recent memory, it is easy to see how we bastardize information in politics. However, it is done every day in the making of public policy as well. One only has to look at the recently introduced House File: 916, and Senate File: 845.

This bill, if it becomes law, will circumvent the normal environmental permitting process for mines. Essentially, the bill calls for additional legislation and regulation over and above the existing strict and stringent State of Minnesota regulations. There is no evidence or moral crisis that supports the need for additional legislation. Contrary to whatever propaganda one might read on the Internet, companies – out of sheer necessity in a society where reputations can be sullied rather quickly – want to do the right thing. Moreover, state regulatory agencies already have the statutory authority and rules to demand financial responsibility and to assure air and water quality in the sighting of any new mine.

More directly, House File: 916 and Senate File: 845 are thinly disguised proposals to kill non-ferrous mining in Minnesota. More specifically House File: 916 and Senate File: 845 are targeted at the proposed PolyMet project at the former LTV site near Hoyt Lakes. According to one recent accounting the “$602 million project is estimated to produce 400 permanent good-paying jobs; at least 500 spin-off jobs; 1.5 million man hours of construction work; $40 million in annual payroll; $17 million each year in local and state taxes.” One has to ask, then, why would anyone - especially a state legislator – in times of fiscal desperation, want to kill such a project?

I can only surmise that some State Senators and Representative have picked up some bad information on the Internet, or are listening to those who do.

You can help. Send the following Senators and Representatives an email and tell them to drop their support for House File: 916 and its companion Senate File: 845. Tell them that it will hurt not only Northeastern Minnesota but that all of Minnesota will feel the pinch through fewer jobs and tax collections. And, when that happens, we’ll all feel it; nobody will have to read about it the Internet.

Send a mass email to the following:
sen.satveer.chaudhary@senate.mn
sen.dan.skogen@senate.mn
sen.pat.pariseau@senate.mn
sen.scott.dibble@senate.mn
sen.steve.dille@senate.mn
rep.kent.eken@house.mn
rep.paul.gardner@house.mn
rep.denny.mcnamara@house.mn
rep.paul.anderson@house.mn
rep.karla.bigham@house.mn
rep.tony.cornish@house.mn
rep.david.dill@house.mn
rep.andrew.falk@house.mn
rep.steve.drazkowski@house.mn
rep.alice.hausman@house.mn
rep.tom.hackbarth@house.mn
rep.rick.hansen@house.mn
sen.tom.saxhaug@senate.mn
sen.dennis.frederickson@senate.mn
sen.satveer.chaudhary@senate.mn
sen.steve.dille@senate.mn
sen.gary.kubly@senate.mn
sen.pat.pariseau@senate.mn
sen.patricia.torres.ray@senate.mn
Rep.roger.reinert@house.mn
Rep.mary.murphy@house.mn
Rep.tom.huntley@house.mn
Rep.david.dill@house.mn
Rep.tom.rukavina@house.mn

At the Duluth Area Chamber of Commerce’s FORVM, held on Tuesday, January 6th, Mayor Ness talked about the potential of selling the City’s natural gas division of Comfort Systems. This may be a good move on the city’s part; they would gain a large infusion of cash, lessen its legacy costs and potentially lower costs to end users.

We have been following this issue for some time. In the interest of educating our members, we compared and contrasted end user costs for similar cities in Minnesota (Rochester, St. Cloud, Bloomington and Duluth). The price Comfort Systems currently charges to its customers is $1.43 per thermal unit. St. Cloud, on the other hand, charges it users $.68 per thermal unit – the lowest charge of the communities we compared. Residential and business customers in Duluth, then, pay two times as much to heat their homes and businesses as they do in St. Cloud.

In an interview with the Northland’s NewsCenter, Sharla Gardner, Third District City Councilwoman, stated that she is against selling the gas portion of Comfort System, reasoning that eliminating local control of Comfort Systems would mean an increase in costs. Unfortunately, Gardner is misinformed about this point. Duluth’s prices are set by Comfort Systems and approved by a vote of the city council. We have local control. Other systems – privately held companies which essentially operate a monopoly – have to ask permission from the State of Minnesota Public Utilities Commission to raise their rates. This process is often grueling and involves justifying their rate increases. Essentially, the commission works to make sure that the gas monopoly does not unfairly profit from its status as a monopoly.
As it stands, Comfort Systems’ rates are not subject to the same scrutiny because the system is wholly owned by the city and a simple majority vote of the city council is all it takes to raise rates. As a result, our gas utility is quick to raise rates. Local control and oversight of the utility has resulted in the opposite of Councilor Gardner’s proposition: we pay more for gas than other comparable cities.

It is unfair to condemn any potential sale of the gas company before our community is able to fully explore the possibility. Mayor Ness, in the most fiscally challenging times since the Great Depression, should proceed with his plan to investigate selling the utility, using an independent expert to make recommendations. If the city could benefit and residential and business customers could pay much less for service, we all win.

You have an opportunity to weigh in too. Email the council at council@duluthmn.gov and let them know your thoughts. Remember, Comfort Systems is owned by those of us who pay for it. We should have a voice in what happens to it.

My colleague, David Ross, has a virtue that has served him well: he is a pragmatist. He looks at most situations, makes a decision and moves on. It has served him well. Try as I might, I struggle with pragmatism. Instead, I am a ruminator. Don’t ask me where I picked it up or why I cannot shake it off. It is what it is – I cannot let go of things. Things that bother me hardly bring a shrug to the shoulders of some of my co-workers. Sometimes I lay awake at night or get up early because I am bothered by certain issues. For instance, this morning I climbed out of bed at 4:00 AM and came into the office because I was thinking about the upcoming elections and the way our city-owned utility charges onerous fees and taxes on gas.

I am troubled that business, after Mr. Obama’s almost certain election, will face the Employee Free Choice Act. This act – tantamount to calling nuclear weapons peace bombs – may have an easy time passing the US congress given the certainty of one party federal rule. Small businesses with as few as five employees may be affected. This Employee Free Choice Act, while portrayed as the cure to employee pay and benefits, is about building the unions’ political power and not about employee rights, pay or benefits. You will undoubtedly hear more about this issue after the November elections.

I am also deeply troubled that Duluth is using the gas utility, Comfort Systems, to fund a good portion of our retiree health care problem. To do so, the City charges an onerous fee in lieu of taxes (PILOT) of 7% and they charge every customer a 1% sales tax. Recently, the Minnesota Attorney General appeared in Duluth to protest Minnesota Power’s first rate increase in over a decade, calling it “outrageous.” Senior citizens complained that such increases were unjustified. A few citizens said enough already, claiming they might even have to choose between things like medicine and paying their electric bills. Given this outrage about Minnesota Power’s rate increase, it is ironic that a private company, like Minnesota Power, has to elaborately justify its increases – increases mainly due to state legislation that the utility burn renewable fuel rather than coal - to the Minnesota Utilities Commission, at the same time, the City of Duluth can pass along optional fees and sales taxes through a simple vote of the city council. The fees and tax, while legal, are entirely optional on the city’s part. Duluth, in its budget for 2009, states that it will make $4.7M from the PILOT fee. This is almost half of what the city will make on property taxes. Where is the outrage that should accompany such things?

Several months ago, I spoke to the city finance director about the PILOT fee. After a bit of cajoling about the optional nature of the fee – the city does not have to charge a PILOT fee or sales tax - her response to me what that it was “nice revenue.” I don’t fault her for such a comment. After all, her job is to make sure the trains run on time and that our bills are paid in a timely fashion. However, we should be concerned that each and every business, homeowner, or tenant be able to keep more of his or her money rather than give it to the city as “nice revenue."

One city councilor is proposing a windfall profit ordinance for the PILOT fee. This kind of political charge is normally aimed at oil and gas companies. In this case, however, it is aimed at our publicly owned utility. The ordinance would make sure the city does not wildly profit from consumers. As it stands now, the city will make more money if the winter is cold and the bills are high. That means if a customer’s total bill for winter heating is $2,160.00, including fees and taxes, he or she could have paid $2,000 without such fees and taxes. The $160 savings could then be used for necessities or an extravagance of the consumer’s choice, for instance: Christmas gifts. It is not right that the city charges so much.

At the Chamber FORVM on Tuesday, November 4, we’ll talk about public ownership of the gas company. We’ll address such issues and challenge guests Greg Gilbert and Todd Fedora about the fees, taxes and direction of the utility. Jim Benning, City Works Director, will also be on hand to answer technical questions about the utility. The FORVM will prove to be an interesting discussion and one that might potentially lower the heating bills in your homes and businesses. I am hoping you’ll join Linda Kratt and me as we talk about this important matter.

Call me foolish, call me possessed, but just knowing that the Chamber is advocating for you, our member, makes me feel a little better.

See you at the FORVM.

Chamber FORVM
Tuesday, November 4
8:00am – 9:00am
Technology Village – Playground Theatre (first level)

The FORVM is a great place to learn about issues that affect your business. It is also a great place to have your voice heard and to give input into the policy approach the Chamber ought to take. However, we know that many of you - try as you might - cannot attend this monthly meeting. As a result, you may feel left out of the process. Our goal is to make sure we hear your voice and that you have adequate opportunity to give input.

Last week, the FORVM addressed some of the chronic budget issues that the Duluth Fire Department has experienced. Our perspective is the department should work to reduce costs while at the same time offer good service. Guests included: John Strongitharm (Fire Chief), Erik Simonson (Fire Marshall, Fire Union Steward and Spokesperson), and At-Large City Councilor Jim Stauber (long time critic of the department).

The outcomes of the FORVM's discussion included the need for continued dialogue and critical study. Chief Strongitharm - an excellent advocate for his department - pointed out that the department has already reduced costs over a period of years and it bears the cost of building inspection, something other departments don't always do. He made a case that the department has significant challenges, including geography and a model of public safety that drives a certain level of staffing. The chief also purported that 24 hours shifts were necessary to allow for 3 hours of training per day.

Councilor Stauber - always the financial reformer - challenged the department to do things differently, while providing good response time and fire protection.

Erik Simonson - a downright decent person - relayed the detailed and specific challenges fire fighters face, including high OSHA standards and a higher than normal need for safety.

All three gentlemen made great points.

At the end of the discussion, we at the Chamber continue to maintain the department should become part of the budget solution.

The whole matter is complicated by the department's political activism. They have publicly worked to influence local elections. They, in fact, outspent every special interest group in Duluth in the last municipal election.

This is not to say the department has participated in any corrupt or illegal activities. Rather, that kind of activity is unbecoming and seemingly puts their interests above those of Duluth's citizens. This should not be so - the department should end its political activities and fire fighters ought to participate as any regular citizen might participate. Their group approach to politics smacks of self-interest.

Lastly, the blogs and FORVM spurred intense interest from members. This issue ranks in the top three response generating issues in my tenure - almost nine years - at the Chamber. The emails and calls ran 125 to 1 calling for reform. While this is, of course, nice to hear, the real issue of how to accomplish reform remains. Clearly, it is time for the city to take a long term approach and ask what model of public safety and what level of service is adequate to protect the citizenry. For instance, should the department respond to every medical call and what are our doable options? Are twenty four hour shifts something we can continue to afford?

Clearly the FORVM and blogs brought out strong feelings. However, as one member put it: we must find a way to find an independent authority to do a thorough review of the department and either leave things as they are or suggest change. Once that happens, the department, the administration and the council should have no trouble supporting the status quo or adopting change.

We think this message is important. City budgets drive taxation. Too much taxation and you punish business. When you punish business you punish employees. We are in this together. We must find a way to get it done. If you agree, email the mayor, the chief, or the council and tell them it is important we get the best city services for the least amount of money.

On July 31, a full page editorial appeared in the Duluth Budgeteer News. The editorial was authored by Erik Roadfeldt, the City of Duluth firefighters’ union secretary. In the editorial, Roadfeldt explains the arduous days of firefighters, who often go without sleep due to demands of the job. He also takes City Councilor Jim Stauber to task for questioning the department’s actions and expenditures. One ought to be careful about the message he or she sends and the message others receive.

The editorial spelled out the overwhelming demands of the fire department when they are required to work twenty four hour shifts. The editorial implied that Stauber and others should not question the Fire Department’s budget and practices.

The department ought to practice what it preaches. Late yesterday, I witnessed twelve fire department personnel soliciting donations from motorists at the intersections of London Road and 40th Ave East and at Superior Street and 27th Ave West. They were all in full uniform. The group on London Road also had two fire rigs parked within eyeshot. Firefighters at both locations wandered in and out of traffic to collect monies from passing motorists. Clearly these firefighters were on the clock and using public equipment, while sacrificing sleep time, to gather money for a charitable group.

Don’t get me wrong. I have some favorite charities and I occasionally solicit the purchase of a raffle ticket from a co-worker, but it is simply wrong to exploit a publicly owned service like the fire department to solicit money. First, the department, I am assured, has a strict policy against using fire rigs on non-essential business. Using the rigs as a transport vehicle clearly violates department policy. Secondly, taking twelve fire personnel away from much needed rest could and may endanger public safety. Lastly, leveraging the good reputation of the department to collect charitable money - while at the same time trying to enhance their own image – is, at best, unethical. The short term gains of their activity outweigh the public good.

Some may say that I am nit picking. I may well be. However, the department purports that any funding cuts will slow response time. Mr. Roadfeldt complains about lack of sleep on twenty four hour shifts. Perhaps the department – at a minimum – ought to figure out its priorities while elected and members of the public challenge them to provide the best service possible at the lowest price they can.

At the Chamber’s upcoming FORVM, September 2, 2008 at 8:00 AM in the Playground Theatre at the Technology Village, we’ll talk with Mayor Ness and City Councilor Jim Stauber about the fire department. If you agree or disagree with this posting you are welcome to attend and have your voice heard. As always, I appreciate hearing from our members. If you would like to offer me your feedback, I can be reached at apeterson@duluthchamber.com or 218-740-3752.

How come every time the city looks at making budget cuts the fire department circles its fire trucks and claims it cannot be touched? This is evidenced in letters to the editor, op-ed pieces, and statements to the media stating that if budget cuts are enacted the fire department will have slower response times. Longer term defensive efforts have included political action - so much so that their political action committee outspent every other group in the last city election cycle ($39,766 to help elect friendly candidates). They are serious. Any threat to their budget or way of doing things will evoke an immediate and defensive response.

Witness the recent op-ed piece by Erik Roadfeldt in the Budgeteer News: Taking a look at what firefighters do in a day. In the article, Roadfeldt chronicles a 24 hour shift on July 31, 2008 and excoriates City Councilor Jim Stauber for his long standing promotion that the department can operate more efficiently. Clearly the intent of the article is to reinforce the department's intrinsic value to the community and the sacredness of its budget. To those who dare question, even if they are elected to watch over public money, the message is: do not dare question us.

What is unfortunate, is by taking this approach, the department is unwilling to entertain ideas that the city can get more from the department at a lesser cost. Roadfeldt, in his article, laments the long hard hours he puts in without uninterrupted sleep. He makes a point. Twenty four hour shifts may be too taxing for anybody much less those who have life saving responsibilities and extreme physical demands. Why not follow the lead of other life saving professionals such as police officers or nurses? They work eight or twelve hour shifts and do not have to make arrangements to sleep on the job. If Roadfeldt and his colleagues worked shorter shifts they would be more rested, they could spend more time with their families and the city would save money. Ultimately, more rested fire personnel can respond quicker, more effectively, and the city would get eight or twelve hours of work out of a fire person rather than having to budget the expense of providing time and place for employee rest. It works for cops and nurses - why can't it work for fire fighters?

Mayor Ness has made difficult decisions in his short time as mayor. He will have to make many more before his term is done. Having one department immediately state they will be compromised by any cuts is ludicrous. Having that same department work the political system to ensure that elected officials who think taxpayers deserve the best services at the lowest possible price look bad - because they are concerned we get the best possible services at the least possible price - is crazy.

Let's be honest here. There are ways to have effective public services - including fire protection - at a lesser price. To do so, we have to stop circling the fire trucks every time the department sees a change coming. Tell your elected officials that you want the best value for your money. It will not be easy or painless but when we get there we'll send the message that Duluth can adapt, we can solve our own problems, and we are open for business.

You can let your city councilors know how you feel about this issue by emailing them at council@duluthmn.gov.