Examiner columnist draws wrong conclusions

As a member of the Independence City Council, and the Chairman of its Audit and Finance Committee, I am responding to a recent column in Examiner. In his September 7, 2012 Examiner On My Mind article,  Mr. Everett has accurately recited information that has been available to the public since May 14, 2012 when the Council was presented the Proposed Operating Budget for the fiscal year July 1, 2012 through June 30, 2013. In fact, much of this information was available and publically discussed prior to the budget document Mr. Everett referenced.

After listing 14 projects shown in the Line Item Budget Supplement, and their corresponding amounts budgeted for debt principal and interest, Mr. Everett exclaims that, “These figures show that our City, in servicing its indebtedness, pays out more than double in interest and fees than on principal!”  Though he uses the words, “It appears that we should have serious concerns,” he goes on to conclude that this information means the City has not been a good steward over its finances.  His conclusion is based upon facts and figures taken out of context and that is what I, as an elected official, take issue with and will address and clarify here.

 First, anyone who has ever purchased a home or a car knows that it is common lending practice to front load the interest to be paid when calculating the payments on borrowed funds.  A homeowner may make payments for many years before more of the payment goes to the principal than to the interest owed. So the ratio of interest to principal paid has everything to do with the age of the loan and nothing to do with whether it was a sound financial decision to borrow the money.  Second, when all the projects or departments Mr. Everett lists are totaled, it equals $19 million in principal and $22.5 million in interest, which is a far cry from “almost double the interest than on principal.”  Indeed, if just one project, the 4-year-old Independence Events Center, is removed from the list, the totals become $18.7 million in principal and $17.4 million in interest.

 What Mr. Everett did not point out was the benefits our citizens, businesses, and tourists have received from the projects we have financed. Capital projects funded by this debt include:

·         Adventure Oasis Water Park;

·         Athletic Sports Complex;

·         Purchase of emergency equipment for the Police and Fire departments;

·         Improvements to our electric and water transmission and distribution systems; and,

·         Acquisition of an electric generation facility to provide reliable power to the homes and businesses in Independence.

 

These projects have provided basic services, improved public safety, and enhanced our quality of life.  In many cases, projects that are debt financed are associated with funding that the City committed to use for such purposes and within certain timeframes. Keeping our commitment to the citizens is part of the equation of determining when and when not to issue debt.  Another factor considered is meeting the needs of our departments and the regulatory mandates placed upon our city by the State and Federal levels of government. Each issue is carefully evaluated to determine the best and most cost effective way to proceed.  These reviews include input from City personnel as well as external financial experts, including the national bond rating agency of Standard’s and Poor. This is an outside, independent review of the debt issuance.  This expert input and evaluation is available to the Council for review as decisions are made.

 Additionally, the City has used this debt to generate economic development within the City.  In many cases the improvements have been for transportation systems. Examples of this are improvements to Jackson Drive and the Little Blue Parkway that allow better access to Centerpoint Hospital from the north. A city must always be evaluating and prioritizing its needs, as well as the best, most cost-effective ways to provide for those present needs while planning for future ones. Getting behind the curve on major issues can be much more costly than carefully and thoughtfully using debt to maximize our future while providing for our present circumstances.  Using the prior analogy of the home owner, ignoring a leaking roof will quickly lead to more extensive problems and increased costs.  It is better to deal effectively with the problem at hand, even if it means borrowing additional money.

The City also closely watches for when debt can be issued to achieve the lowest interest rates. We did this with the recent issuance of debt to make required improvements to the sanitary sewer system to meet regulatory mandates from the EPA. We also look for opportunities to refinance our current debt and lower the interest cost on this debt, just as many homeowners have been doing for a number of years.

In conclusion, while Mr. Everett presents correct financial figures, he has failed to present a complete picture of the context in which these figures are significant to our citizens.  His conclusions are incorrect and short-sighted.  Without the wise use of debt issuance, many wonderful projects that directly benefit our citizens could not be undertaken.  While I would love to have City revenue accounts flush enough to fund capital improvements “cash on the barrel,” as my grandparents used to say, this is simply not possible nor desirable today.  This is why we use the common financial practice of issuing debt.  As stewards of our City, we take great care in how and when we do issue it.

It's all about the process

I revived this blog a week and a half ago, wrote my first post, and then started scratching my head as I debated with myself over what topic to tackle first.  After experiencing some recent frustrations with City issues, I decided that the common thread among those frustrations was that in every case, the correct PROCESS wasn't followed and that led to headaches that, in some of the worst cases, kept me from sleeping at night.

I know, I know. The very word "process" spoken in relation to local government evokes images of seasoned bureaucrats plodding along at the pace of snails, passing the issue at hand back and forth in a seemingly endless course of discussions, analyses, approvals, and permits. But trust me, when you want to get through an issue smoothly, using the proper PROCESS is EVERYTHING and you WANT those seasoned staffers doing their jobs at a pace that protects the process.  That's how we maintain the integrity of our charter form of government and thwart the efforts of those who would rather we return to a political patronage system.  That's also how we engage all the players, at the right time, and in the right way, so that decisions can be made that are in the best interest of the community as a whole.

So, exactly what do I mean by using the proper process?  Simply put, I mean "don't put the cart before the horse."  That seems easy enough to understand, but here's where I'm finding the real problems occur:  when citizens, including elected officials, don't take the time to learn and understand the process, tremendous damage can be done.  Sometimes we can stumble quite innocently into situations that go south quickly, because we honestly don't know a process is in place or that there are "behind-the-scenes" processes in play.  For our average citizen, this is understandable.  Trying to get your head around how local government functions and relates to local businesses, organizations, and residents is at best a mind-numbing experience. However, for elected officials and those in influential roles in the community, it is inexcusable to venture into critical city issues without first taking time to learn the proper processes.  Because elected officials have a high degree of influence, merely uttering a comment on an issue in public can cause chaos.  Real estate deals can be thrown off track.  Developers and investors can pull out of deals.  Misinformation can spread faster than a Colorado wildfire.  REAL damage can be done and often, there is no way to rewind the situation and undo that damage.

One of the first things I learned as a new City Councilmember is that I didn't know very much about being a City Councilmember.  I came in with a tremendous advantage over other elected officials because I had served nearly 10 years on the Independence Planning Commission, seven of those as its Chairman.  That experience was INVALUABLE to me as I tried to quickly learn the processes of City Hall and our community.  I already had a solid foundation to build on.  I made some of my more notable mistakes while on the Planning Commission, where I couldn't do too much lasting damage!  I have to admit that many, if not most, of the wrong steps I've made were the result of not knowing the proper process, but in each case, I believed it was my job to understand what went wrong and try to avoid making that mistake again.  It's a humbling thing to have to admit you didn't know something and that as a result, you screwed things up.  Humility is one of my favorite characteristics in leaders, so I strive to make that quality a part of me. Humility and patience.  Patience is probably the quality that most gets in the way of understanding proper processes. It's also a quality I'm still working on.

Former City Manager Larry Blick said to me recently that one of the most important lessons he learned over his lengthy career in city management was that the process is just as important as the end-result.  I believe him!  HOW we get from Point A to Point B is just as important as arriving at our goal.  I might have what I believe is the best solution to a problem, but if I bully my way through with it, circumventing the proper process, I will likely fail in some aspects.  I may get my solution in place, but the tactics employed to get it there may have cost me much more than I gained.  I may have won the battle, only to lose the war...or worse, my reputation and/or my integrity.

So, what am I really trying to say here with this lengthy commentary?  As a leader, you've got to know what you know and what you don't know, have the humility to admit that to yourself and others, take time to get educated about processes and issues before taking action, and have patience through it all.  My mantra as a public official is this:  Someone else always knows more than I do on any given subject, so I'd better make sure I have ALL my ducks lined up BEFORE I take action.  Reminding myself of that daily puts me in a better position to listen to all the facts and opinions, and, I believe, makes me a more effective, open-minded leader. That's my goal anyway.  Feel free to tell me when I seem to forget that. Really. I mean that.   :-)

Setting the stage...

I've thought a lot this week about what topic my first "revived blog" post should focus on. There are MANY issues in our city right now that warrant sharing accurate information on. Rather than choose one of those, however, I decided to spend a little time sharing what my values are in regards to serving as an elected official, and what you can expect from me here and out in the community. First, let me state up front that I am a Christian with a deep conviction that it is my responsibility to act as such in BOTH my private life and public life. That, above all else, influences how I try to conduct myself as a public servant. The following are some beliefs and standards I hold myself accountable to (in no particular order of importance): **Treat all people with respect. **Act in a manner that I want my sons to emulate. **Serve with a sense of selflessness. **Educate myself as thoroughly as possible on issues and make decisions in the best interest of the WHOLE community, not just for the favor of a few individuals. **Hold myself to the standards of the professional organization that governs city management. It these ethical standards are good for our hired staff, I should hold myself to them as well. **Deport myself in a professional manner during meetings and public appearances. **Never make statements that I cannot support with evidence. **Extend Grace when others fail. **Always "praise in public, punish in private." In other words, never demean staff, citizens, or other officials in public or use inflammatory remarks that would question someone's integrity. **Speak the truth. **Speak truth to power. **Encourage others to act in positive manner, always for the betterment of our community, and without regard for obtaining personal gain or self-aggrandizement. So. There you have it. I hope I've set the bar high enough, and that I reach it often enough, to make my God and Creator pleased with my efforts in this life. I fail often, but I try to understand why, and then I try to do better. And, when others fail, I try to extend grace to them and lift them up so they can achieve their positive purpose in this life. Now, having set the stage, my next blog will focus on a current city issue. Thanks for letting me share with you a little of what I'm about. :)

Reviving District One Blog

It's been a long time!  Frankly, I set this blog aside quite some time ago because it seemed like it took too much time to blog.  Lately, however, I've been re-thinking the value of using a place like this to share ACCURATE information about important issues in our community.  So, I'm reviving this blog and getting geared up to share with you again.  This will be linked to Facebook and Twitter and you can also follow this blog directly here.  Get ready to be well-informed!  The information will start flowing soon!