PRESENTATION TO MARION, IA MAYOR AND CITY COUNCIL

WHY PEOPLE THINK TAXES ARE BAD

3-3-11

Marion Mayor Rehn was quoted in the Gazette as saying,  'I don't know where the idea came from that taxes are bad. Taxes provide the services that people say they want.'

1. Presuming the Gazette got it right this time—I’m here tonight to present a handout explaining why people think taxes are bad. 
2. The council was given the handout with a table showing operating efficiencies and waste for Marion city composite and 14 organizations—now posted on website http://iowalive.net/    Iowalive net workers assisted with the handout.
3. The operating efficiencies were derived with methods that Governor Vilsack could not refute, as discussed in the handout.  He was very upset at learning his office was operating at 19% efficiency. 
4. Marion efficiencies ranged from 66% for Public Services to 10% for Planning and Development.  Marion’s composite efficiency improved to 44%--and gets a grade of B.   But it is out-performed by Center Point at 46%, despite its much smaller size and huge disadvantages of reversed economies of scale.
5. Now for the bad news.
   1. 11 organizations wasted 55% to 90% of their budgets.  
   2. Waste increased $911,119  from the previous year—to a total of $9,499,366

                                          i.    With such waste, there should be NO tax increases.

                                        ii.    Much better use can be made of existing taxes!

3. Would anyone like to argue with taxpayers who think taxes for such waste are bad?
5. Now for some better news
   1. Road Use Fund Usage (63%) and the Library (62%) were above 60%, which places them in the performance realm of businesses.

                                          i.    Linn County Solid Waste, formerly Blue Stem is operating at 65%. 

2. Road Use Fund Usage, Fire Dept. and the Legislative organization wasted less the past year than the previous year—as did Linn County Solid Waste!!   GOOD JOB!!

                                          i.    It could certainly be argued that taxes for them, Public Services and the Library are GOOD—as Mayor Rehn stated!

7. Anyone interested in seriously challenging these numbers should seriously consider having the American Productivity and Quality Center, from Houston Texas—provide a comparable evaluation and performance table, for an estimated cost of at least $240,000.
   1. I was thoroughly trained there, many years ago!!  They are good!!
8. In closing, a word about Public Services and Linn County Solid Waste organizations
   1. They work out of what could be called sheds or temporary buildings
   2. They are focused on making continuous improvement
   3. They are unpretentious
   4. They listen to the folks!!
   5. They out-perform everyone!

Thank you for your time and consideration—and hopefully for you visiting with the folks at Public Works and Linn County Solid Waste, to learn how they do it!!

HANDOUT TO MARION MAYOR & CITY COUNCIL

WHY PEOPLE THINK TAXES ARE BAD

3-3-11

It is true that taxes pay for services provided by the city of Marion, Iowa.  In that context, taxes can be good. 

Taxes also pay for waste and wasted effort etc. performed by the city of Marion.  In that context, taxes are bad. 

As shown in the following table, three Marion city organizations, Public Services, Road Use Fund Usage and the Library are wasting far less than half of what they cost or spend.   For those 3 organizations, it could be reasonably argued that taxes are good. 

However, the table also shows there are 11 organizations that wasted 55% or more of what they cost and spend.  Would any thoughtful person wish to argue with taxpayers who think taxes for these organizations are “bad”?  

Beyond that, the operating efficiency of 5 organizations fell, as noted in larger bold type.

The good news is, three organizations, Road Use Fund Usage, Fire Dept. and Legislative wasted less than the year before!!  These organizations are reducing inflation!  All the rest are increasing it. 

The operating efficiencies in the table are derived using proprietary algorithms and data base discussed on website:  http://iowalive.net/ .  Anyone attempting to challenge the derivation methods is advised they have been used for at least ten years, with only one serious consideration of challenge. 

Governor Vilsack did not like the 19% operating efficiency for his office posted on the website.  However, his performance improvement and measurement consultants advised him he had no better number, and in fact he had no comparable numbers at all.  In addition, the consultants told him the more they looked at his office and the 19% number, the better it looked.  They then called net workers to learn how it was done, to their satisfaction.  Vilsack backed off!

The 3 Marion organizations performing above 60% operating efficiency are in the realm of private sector business efficiencies—and are commended for it.  It can be done.  The Linn County Landfill organization, formerly Blue Stem, is also in the business realm at 65% commendable efficiency.

As noted in the table, there are some actions in the mill that will improve performance of most Marion organizations.  It would be most helpful if these actions were backed by comprehensive performance improvement plans—approved by the Council, and published in the Marion Times. 

It is expected the composite operating efficiency for the city of Marion will rise to at least 47%, in the next year—as a result of making progress, rather than excuses.  J  It is also expected the amount of waste will be less than the $9,499,366 wasted in the past year! J

It is estimated the American Productivity And Quality Center, at Houston, Texas, would charge at least $240,000 to evaluate and prepare a comparable Marion performance table—which if Marion requests a quote, would likely be the first such request for quote from a similar size municipality. 

MARION WASTED $911,119 MORE IN FY 10-11 THAN IN FY 09-10

Although not shown in the table, Public Services is Marion’s top performer at 66% efficiency, which includes Road Use Fund Usage.  19 improvement projects are already in the mill for next year.   Their emphasis on continuous improvement is outstanding—and successful.   Similarly, improvements made to the pay for performance system will show over-all city efficiency improvements next year, and for following years as well.  Marion gets a grade of B for performance comparable to other cities.  But it is still topped by Center Point’s 46% operating efficiency, despite its disadvantage in economies of scale—due to its much smaller size. 

Note:  Utility Co. inefficiencies, space utilization and contractor inefficiencies have adverse impacts on City Hall and Legal Services efficiencies, respectively.  Prepared by: M. D. Weltha  PE—and Iowalive net workers.  3-3-11