Tuesday, October 02, 2007

Rational Economic Thought

October 2, 2007, 6:30, 10:00 a.m.; October 3, 2007, 7:15 a.m. (addition of Fire Chief Rocca's proposal)

Three reassuring stories this morning from the Department of Rational Governmental Analysis.

Women Bite Dog -- of a TIF Proposal. The Gazette reports that the Iowa City City Council members of the City's Economic Development Committee voted down the Mercy Hospital doctors' request for a $600,000 TIF. See Nicholas Johnson, "A TIF-kit's a Basket, With Money for the Askin'" in "TIFing Your Doctor," September 12, 2007. The "No" votes came from Council Members Regenia Bailey and Connie Champion (hence the "women bite dog" headline). The story reports, "Wendy Ford, the city's economic development coordinator, said she was not aware of a previous TIF application being denied at the committee level." Let's hope this is the beginning of a trend -- and not just a pre-election conversion. Gregg Hennigan, "TIF for I.C. Surgical Center Gets Thumbs Down," The Gazette, October 2, 2007, p. B7.

Thinking Outside the Firehouse. As Iowa City fire fighter Eric Nurnberg has detailed, "Fire Department" is a misnomer in the 21st Century world of responsibilities that fall to our "fire fighters." Eric Nurnberg, "This election, make sure that the Iowa City Council prioritizes firefighter safety," Iowa City Press-Citizen, September 30, 2007.

I don't pretend to have the answer to how many firehouses and fire fighters we need, or the basis for calculating response time. In large measure, it seems to me, these are, like the issue of expansion of the Iowa City Police force, a matter of "peak-load analysis" -- along with a lot of Internet research that looks at much more than population figures and crime (and fire) statistics. Nor do I know anything like all of the innovative responses other communities have brought to these issues.

But what I do know is that our Fire Chief, Andy Rocca, has come up with one of them.

There are a lot more sirens these days than when I was a kid growing up in Iowa City. In part, that's because the population has expanded and more tasks fall to the police, fire, and paramedic personnel. But at least a part of it is duplication, when much of what all three are doing is paramedic work.

So, at a time when the City is trying to figure out how to pay for, and staff, a fourth fire station, the Fire Chief has done the unbelievable: Instead of fighting to preserve his bureaucratic turf he's doing a little thinking outside the firehouse and proposing a merger of sorts of the Johnson County Ambulance service with the Iowa City Fire Department.

The details have to be worked out, and I don't know what kind of hurdles will be found when they are. That's not the point. The point is that it's the kind of thinking we need a lot more of around here.

Face it, all of the "cities" in this metropolitan area -- Iowa City, Coralville, North Liberty, University Heights, Tiffin, you name 'em (including the University, a "city" in its own right) -- don't have a combined population any greater than a large apartment area in one of the world's larger cities.

We have an unbelievable duplication of governmental units, bus and other transportation systems, school districts, police and fire departments, and so forth.

As the Frenchman said when asked why he kissed women on the hand: "Well, you have to start somewhere." Andy Rocca has shown us how to "start somewhere" with this kind of thinking. And that's why he gets one of the "Rational Economic Thought" awards of the day. Lee Hermiston, "Iowa City Fire Chief proposes consolidating fire and ambulance services," Iowa City Press-Citizen, September 27, 2007; Gregg Hennigan, "Iowa City Chief Suggests Fire-Ambulance Service," Gazette Online, September 27, 2007.

Digging the Dirt. It sounds like a no-brainer, more a bit of dust blowing in the wind than digging dirt, but you'd be surprised how often the obvious is overlooked. The Cedar Rapids Airport Commission is building a $5 million public safety facility at the Eastern Iowa Airport. The project requires a supply of dirt for fill. Normally that would be an added cost. Someone noticed that a runway project required that contractor to haul away large quantities of dirt. "How about we keep it here?" they asked. "We won't have to pay to have it hauled away. We won't have to pay to have more hauled in. We can just use what we have." Bingo -- and $80,000 in savings.

It's just one more in a long history of examples that creative thought, often just a child's common sense, can create approaches that simultaneously reduce cost while improving quality of goods or services. (I recall an example from 40 years ago when GE got a Commerce Department award for efficiency and energy conservation at one of its manufacturing plants. What did they do to deserve that? Someone suggested they close an enormous sliding door in the winter time -- resulting in a 30% savings in heating bills.) George C. Ford, "Airport Hits Pay Dirt; C.R. Commission Approves Contract That Saves $80,000," The Gazette, October 2, 2007, p. B8.

And speaking of moving dirt and defining a mission. The Press-Citizen editorializes this morning in support of the $120 million, 200,000 square-foot Institute for Biomedical Discovery and $20 million Bioventures Center in the UI's Oakdale Research Park. Editorial, "Groundbreaking More Than Just Moving Dirt," Iowa City Press-Citizen, October 2, 2007, p. A11. These projects are both consistent -- or at least appear to be -- with what I wrote about as President Sally Mason's clear articulation of a major role for the University. Nicholas Johnson, "Stonewalling Not a Winning Strategy . . . but President Sally's Mason's May Well Be" in "Regents Examine Credit Card Scam," September 28, 2007.

The challenge, from my perspective, is to "follow the money." (See, "Memorable Lines," Deep Throat to Woodward, in Matt Slovick, "All the President's Men," Washington Post (1996).)

Potential positives: genuine collaboration between UI researchers and for-profit professionals, working on projects UI researchers would be working on anyway, that provide a payback to the University and benefits to all Americans and all corporations wishing to profit from the advances.

Potential negatives: the use of the UI as little more than a money laundering intermediary for a transfer of Iowa taxpayers' money to the bottom line of a single for-profit enterprise with little meaningful involvement of UI faculty, staff or students; or, the use of UI researchers to create products or services that inure to the benefit of one lucky firm to the exclusion of all others and the resulting monopoly prices for consumers.
And the latest from the Department of Revenue is Needed. At the end of a persuasive editorial yesterday regarding the benefits of the fraudulently-named "21-only" proposal (fraudulent because bars can still sell liquor illegally to those under 21, just not after 10:00 p.m. when those patrons ought to be heading for home anyway), the Press-Citizen spoils it all by back-tracking, "But even we are concerned with how this decision might affect the Iowa City downtown economy" -- what it refers to as "unintended consequences." Editorial, "Spell Out the Unintended Economic Risks for Going 21-Only," Iowa City Press-Citizen, October 1, 2007, p. A11.

At a minimum, if one is to consider the "unintended consequences," or "externalities," of alcohol policies one is obliged to include the unexpected savings as well as the unexpected lost revenue. The savings (or reduced pressure for increased costs) include reduced demands for expansion of the local police force, and paramedics, City employees cleaning the vomit off the streets Friday, Saturday and Sunday mornings (rather than billing the bars for the cost), the impact on local jails and justice system, the need for early morning hours transportation, lights and escorts. See, e.g., Kelsey Beltramea and Ben Fornell, "Alcohol Tickets Pour In," The Daily Iowan, October 1, 2007, p. A1, and Kathleen Olp, "Nite Ride Starts Well; The Safe-Ride Option Draws 55 Students on Its First Night of Operation," The Daily Iowan, October 1, 2007, p. 5A.

Gazette Should Give Itself "Gomer." Monday is "Homers and Gomers" day at The Gazette. But the Gomer it presented to Earthpark October 1 concluded, "This bold, decade-old proposal that would include a 4-acre indoor rain forest, 600,000-gallon aquarium and prairie and wetland exhibits has potentially great benefits for Iowa as a tourism attraction and educational venue." Editorial, "Earthpark/Gomers: What's Going Wrong," The Gazette, October 1, 2007, p. A4.

"Bold?" What's bold is the gall of Senator Chuck Grassley to earmark and offer up $50 million of the federal taxpayers' money for this boondoggle.

"Decade-old?" The reason it's a decade old is that nobody, I mean nobody, besides Grassley and project founder Ted Townsend, has been willing to part with a dime for this project in spite of the promoters' hard-sell trying with some of America's largest corporations and wealthiest philanthropists.

"Benefits for Iowa as a tourism attraction?" When the proposed scope was a $300 million structure the project's own consultants counseled against cutting it below $225 million (because being "the world's largest" is essential to tourism). And that was when it was to be located along one (or more) major Interstate highways. It has subsequently been cut to $225, then $180, then $150, and now $140 million -- and located in little Pella, Iowa, with the tulips, well out of easy driving distance, let alone sight, of Interstate 80. No independent economist I know believes this project has a prayer of making it as a tourist attraction.
The project has been considered and rejected by virtually all the communities up and down I-80 in Eastern Iowa -- some more than once -- including Cedar Rapids. There's a reason for that. There's much more that can be (and has been) questioned about this project. See, Nicholas Johnson, "Earthpark/Iowa Environmental Project/Iowa Child Project," at http://www.nicholasjohnson.org/politics/IaChild. Bottom line: The Gazette does no one a favor with its indiscriminate endorsement of all proposed projects -- regardless of their lack of reasonable business plan, inability to raise funds over ten years, shifting mission, and mismanagement -- including, perhaps especially, those whose proposals do make sense. The "Gomer" should go to any perpetuation of this earmarked folly -- not the refusal of sane people to fund it -- and to The Gazette itself.

Credit Press-Citizen on Credit Cards. The Press-Citizen had a tough, thorough and informed editorial analysis of the credit card scandal September 29, Editorial, "Openness Helps Ensure UI Deals are Aboveboard," Iowa City Press-Citizen, September 29, 2007, p. A16. And Iowa Senator Joe Bolkcom provided an analysis from his perspective of the adverse impact on the state and what the Legislature has been doing to try to improve the situation. Joe Bolkcom, "Financial Controversy Doesn't Help Young People Make Iowa Their Home," Iowa City Press-Citizen, September 29, 2007, p. A16.

Nicholas Johnson, "Stonewalling Not an Effective Strategy" in "Regents Examine Credit Card Scam," September 28, 2007, produced the following comment:

Anonymous said...

Wonder if any 'lunches with the team' have occurred? Considering the NCAA regulation qouted below, a 'lunch with the team' could be an NCAA violation.

"Promotional activity restrictions: NCAA rules strictly prohibit a student-athlete from promoting or endorsing a business, commercial product or service and/or receiving any type of compensation for promoting or endorsing. This restriction includes but is not limited to the use of a student-athlete's name, photograph, likeness, spoken words or appearance in any type of promotion or advertise from a business, product or service.

Student-athletes may participate in promotions for institutional, charitable, educational or nonprofit organizations but only after receiving prior written approval and verification that the promotion will meet certain criteria set forth by the NCAA. Prior written approval must be received through the Office of Athletics Compliance. Failure to receive such approve could impact the student-athlete's eligibility to participate in intercollegiate competition. "
9/30/2007 12:44:00 AM
It seems to me important enough to repeat here and to suggest that someone in authority ought to be thinking and doing something about it.

Iowa Boys Can Jump. I earlier asked, "But in the 'Iowa boys can't jump' department, just how Iowa is the 'Iowa Hawkeyes' basketball team going to be next year?" Nicholas Johnson, "UI Held Hostage Day 503 - "Pretty please," June 8, 2007. Well, it turns out after traveling to all of Iowa's 99 counties Coach Todd Lickliter has finally found a genuine Iowan who can jump sufficiently high to have attracted the Coach's attention. He's 6-foot-9-inch, 260 pounds, Brennan Cougill, a 16-year-old from Sioux City -- just barely inside the State line -- who did pretty well as a high school sophomore last year. As Pat Harty reported, "recruiting analyst Van Coleman said of Cougill 'He's only 16 years old, so he's just coming out of that baby-fat stage.'" Pat Harty, "Lickliter Lands First In-State Recruit," Iowa City Press-Citizen, September 30, 2007, p. B1.

Isn't it amazing the amount of collegiate and professional team fan enthusiasm that can be whipped up over a chant like, "Our guys from out of state can beat your guys from out of state?" Well, in case the NCAA ever requires that there be at least one player from the state that names a football or basketball team -- such as "the Iowa Hawkeyes" -- we can at least claim that in two or three years we'll have a real Iowan -- sans baby-fat no less -- to give some credibility to the "Iowa" in our name. However, it may be a challenge for our out-of-state coach and basketball team players to make Cougill feel at home. The players will have to use their best out-of-state hospitality to welcome him to the team.

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Anonymous said...

You wrote: "The savings (or reduced pressure for increased costs) include reduced demands for expansion of the local police force, and paramedics, City employees cleaning the vomit off the streets Friday, Saturday and Sunday mornings (rather than billing the bars for the cost), the impact on local jails and justice system, the need for early morning hours transportation, lights and escorts."

Your proposition only follows if in fact passing 21 Only appreciably reduces the amount of drinking by college students. Nobody has any good empirical evidence on this key question, but I just don't see that happening. Ask college kids. They'll tell you it won't. Think of Saturday morning tailgates. That binge drinking isn't happening in a bar. Proponents of 21 Only just gloss over this (to me) obvious point that changing the law is very unlikely to address the problem of excessive DRINKING. It will just change the location. If that is true, then there are many unintended costs, but few unintended savings. What is the basis for your belief that DRINKING will be reduced? Walk me through the argument. Thanks,

anon77 said...

1 - it will make the U of I (the only Big Ten school that allows under 21s in bars after 10 with the exception of a couple bars in Columbus) less attractive to students for whom drinking is a priority, the core group that makes binge drinking acceptable. 2 - everybody knows that college students will drink, big duh, but the rate of binge drinking here is elevated and the current wink-and-nod attitude exemplified by the anti 21 arguments just encourage it further. 3 - it is not a matter entirely about drinking, its about the dishonesty and corruption surrounding a downtown economy based in part on an illegal activity, selling alcohol to minors. 4 if you don't like it then change the 21 law to 18 and along the way prove to us that more teens won't die from drunk driving. 5 if you still don't like it then throw a few keggers at your place (that proverbial OTHER location) and see what happens when you get busted for providing beer to a minor.

Anonymous said...

anon77: I get it that the current law is not ideal and I won't mourn if 21-Only passes. If it does pass I hope it has some positive effect. I just don't think it will and I still haven't seen any evidence to suggest that it will. Madison, WI has a legendary house party tradition and I think that's what Iowa City will turn into, which will be worse for Iowa City, not better. And I think the concerns about the negative impact on live music venues is real.

Can someone link to the "binge drinking rate" study that everyone talks about? I'd like to actually read it. I'm skeptical about statistics like this but will reserve judgment until looking at the methodology.

John Neff said...

The UI surveys were started by Peter Nathan in collaboration with a group at Harvard. I don't know if Peter is still doing the surveys because when I last talked to him he told me they were being discontinued. The were done in odd numbered years and the last year was 2005.

The survey results can be found on the Stepping Up web page under data and statistics. The most controversial part of the study involves the definition of binge drinking because the time interval for a drinking episode is not specified. I have no idea how to find out what the sample size was or how the sample was selected.

Assistant Dean of Students Tom Baker has the most complete data set on students arrested for public intoxication and other related offenses.

It appears to me that some of the facts being quoted are based on reports I did in 2001 with a later follow up. They are out-of-date because since then the ICPD has done sting operations, the 19 ordinance was adopted, some of the bars have had their staff take the TIPS training and there has been an effort to enforce the fire code.

I have no idea how the vote will turn out and if it does pass I would be surprised if one could tell the difference two years from now. Bars open and close frequently in Iowa City one is closed at the moment. If five bars were eliminated the other bar owners would be pleased and most of the rest of us would not notice.

Jeffrey Horne said...
This comment has been removed by the author.