“A tale of two cities,” The Colorado Springs Business Journal, May 4 – 10, 2012, 19.

A TALE OF TWO CITIES

Instead of Charles Dickens’ famous novel about Paris and London during the French Revolution, we are talking about Colorado Springs Utilities and the Pikes Peak Regional Building Department, representing two radically different “cities” or mindsets.

Dickens’ opening paragraph still resonates: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…” Is our city going through “the spring of hope” or “the winter of despair”?

When there is unanimity of public disregard, as is the case with the CEO of CSU (Forte) and its Chairman (Councilman Hente), then no oversight is expected and stonewalling is standard procedure. Perhaps they already concede that CSU will be sold like Memorial, so why bother?

But when there is a difference between the head of RBD (Yankpwski) and its Chair (Brown), when the former responds in person while the latter takes three months to respond by e-mail (after pressure from the other two Commissioners), we can hear quite a bit.

Having taunted RBD’s Commissioners, it’s only fair that a brief summary of their answers should be provided.

Many answers come from the Intergovernmental Agreement that set up RBD in 1966. Once RBD puts it on its website, anyone can read it. It specifies the role of the Commissioners, the composition of their board, and the relationships between the oversight body, the advisory boards, and employment conditions.

Likewise, the organizational charts are in place—they know who does what—but should find their way to the website for public scrutiny.

The budget of $9.5 million (2012) reflects a decrease from $9.8 million (2011) and $11.2 million (2006). Since the budget is entirely composed of fees, and since fees haven’t increased since 2008, staff has been cut from 114 (2008) to 72 (2012).

Other statistical data that may be of interest: in 2011 some 53,000 permits were issued, 63% of them on the website. Around 150,000 inspections were required for these permits with over 80% approved on the first visit; 99% of the inspections are performed the same day they are requested. Pretty impressive!

RBD instituted a call-ahead program where an inspector will call thirty minutes prior to arrival so that the contractor or homeowner can be present. RBD is trying to streamline its operations electronically, from submission to approval, while maintaining a process for appeal with various technical boards. So, why are there still complaints about RBD?

Perhaps the culprits are architects and designers who have been “grand-fathered” when new codes were adopted a few years ago. When developers and owners think they get reliable information about zoning or use-change, they might be mistaken. Better ask RBD officials than rely on some professionals.

It seems that of the three Commissioners, Sharon Brown (Chair), Bernie Herpin (CS Councilman), and Dennis Hisey (County Commissioner), only Hisey takes his oversight job seriously. He recounted in writing his political engagement with state agencies on behalf of RBD.

What is politically at stake here? Why is RBD the “other city” as compared to CSU? While at CSU everyone seems to be asleep, congratulating themselves on lower-than-expected rate hikes for water, for example, RBD is proactive and serious about its mission and responsibilities.

At stake is political leadership that should ensure a climate that is responsive to local needs without shirking public responsibilities, balancing public safety with entrepreneurial efficiency. Developers and remodelers can put pressure on politicians so they perform.

Unlike CSU which raises rates in order to cover an ever-increasing budget—new cars for executives lately?—RBD hasn’t increased fees in four years. Unlike CSU, RBD realizes the impact of the Great Recession and has adjusted its budget.

Unlike CSU, RBD realized that to hustle for new business means spreading its wings outside the region, specializing in school permits and inspections in other counties. Yes, it’s legal; other jurisdictions are puzzled by this competition. This mindset guards against the need to raise fees.

Likewise, some legislation that imposes state electrical and plumbing codes on local jurisdictions ties the hands of RBD’s inspectors. Even when the cases are ridiculous, like requiring a child-proof outlet on the ceiling of garages, the local agency isn’t permitted discretionary application. It has to administer the state code, however bizarre.

Here’s where politics comes into play, and no, it doesn’t require money. Instead, the political leadership of RBD can ask for political help from other local politicians and petition the pro-business Governor who appoints individuals to these state boards so as to allow for greater local maneuvering power.

As long as government agencies hold the power to dictate building codes, the best we can do is direct this power to the local level, where common sense may prevail.

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“Our drug dilemma,” The Colorado Springs Business Journal, April 27 – May 3, 2012, 15.

LEGALIZING DRUGS

It’s easy to understand why former vice-president Dick Cheney claims that president Obama has been an “unmitigated disaster.” But it’s becoming clear that even his progressive supporters are becoming disenchanted with him.

In the Summit of the Americas in Cartagena, Colombia regional presidents discussed the effects of drug traffic to the US and the failed policies of fighting this losing battle, suggesting the decriminalization of at least marijuana.

Obama flatly ruled out legalizing drugs as a way to combat the illegal trafficking that has ravaged the region. This is the same president who we thought was forward-looking, using digital technologies and the Internet not only to raise funds for his own campaign.

At some point, as Tapscott and Williams report in their MacroWikinomics (2010), his administration created the Citizen’s Briefing Book to field ideas from the public that could inform his policy platform.

What astonished everyone was the fact that when citizens could voice their opinions, and suggest topics for policy change, the highest-ranking idea was to legalize marijuana, an idea nearly twice as popular as repealing the Bush tax cuts on the wealthy!  And this while we were engaged in two wars and struggling through the Great Recession.

What did Obama do? He roundly ignored popular demand to reconsider federal classification of marijuana, so that its decriminalization or outright legalization will not be taken seriously.

When in doubt, ignore the public. Attorney General Holder agreed to limit federal prosecution, and confused states passed their own legislation regarding the medical use of marijuana.

If there was ever an economic common ground between the right and left, between conservatives who want as little as possible government regulations and progressives who want government sanction of social conventions, the case of pot legalization is ripe for harvesting.

If there was ever was a legislative common ground between the old and young, those who need pot for medical use or recreationally as a reminder of the sixties and those who feel the urge to rebel and be cool, the case of legalizing pot should be it.

How many prisoners are incarcerated because of marijuana use? How much does it cost us to deal with these non-violent crimes? Is it turning our inner-cities into safer places?

What if pot were treated like alcohol? What if it were regulated and taxed? Would Latin American drug cartels disappear? Even if not completely, would their business diminish? Could we then divert resources to more productive domestic ends?

All of these questions have been asked for years, but when politicians, like Obama, answer them they shift gears from simple economic analyses to social and moral ones. Why not deal with the economic dimension first, and then worry about social effects?

The hypocrisy of conservative legislators is amazing: inserting government regulation where none should be, making social and moral issues legal ones. Let every family struggle with educating its members on the preference of exercising over smoking, reading over television watching, board-games over Tweeting.

When more Americans support rather than oppose the legalization of marijuana, according to a recent Rassmusen national poll, why does Obama ignore them?

Some estimate that enough taxes will be collected from the sale of marijuana to substantially close the federal deficit. Would you rather increase taxes on all to lower the national deficit rather than impose taxes on marijuana users?

Just as Prohibition failed despite a Constitutional amendment, so the war on drugs has failed. For those arguing about the problems associated with the use of pot, fearing lawlessness and crime, it should be noted that a stoner has the munchies and not much energy to rob.

A couple of months ago, The New York Times reported that the amount of tax collection at the city and state level is becoming more significant in tough economic times. It cited Colorado Springs collecting more than $700,000 in taxes from the medical marijuana industry in 2011. Denver collected $3.4 million last year from sales tax and application and licensing fees, while the state as a whole collected more than $5 million.

Putting all of this in perspective will take time. The Obama administration is giving states mixed messages about its intentions, leaving open the possibility that a crack-down is imminent. Perhaps a strong statement from our local leaders can set the tone of the debate.

Regardless of how much common sense we can expect from Washington, we can be progressive and conservative at once and completely decriminalize marijuana. For those who still worry about its effects, the city is installing cameras downtown: Big Brother will be watching!

Raphael Sassower is professor of philosophy at UCCS who encourages free love and responsible intoxication. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“Money and faith,” The Colorado Springs Business Journal, April 20 - 26, 2012, 17.

MONEY AND FAITH

We have heard about Tim Tebow and the merging of faith and sports: is he going too far? Did Jesus really help him win games for the Broncos? What will happen now in New York?

We have heard about the religious views politicians and the merging of faith and politics: should we care if Romney is a Mormon? Should we worry about a Catholic President being beholden to the Pope rather than the Constitution?

But we are not hearing much about faith and business: isn’t the marketplace secular? Do you care if your partner is Mormon or Catholic? What if she’s a Muslim or Jewish?

Morality provides the foundation for the marketplace, from small exchanges to major contracts. When you buy a 500-page packet at OfficeMax, you assume that indeed there are 500 pages inside. Would you waste your time counting them?

Why wouldn’t the company put only 490 pages in each packet and increase its profits by 2%? There is basic trust associated with these kinds of transactions, a moral code we all abide by: the golden rule.

When we follow it, do onto others as you would have them do onto you, we save ourselves the trouble of counting 500 pages. Trust and integrity also mean honesty, consideration, accountability, and transparency, values you find in mission statements that large corporation post on their websites. Moral conduct also equates to efficiency.

But is this trust shared across religious beliefs? Are Mormons as trustworthy as Muslims? What about the Jews who have been maligned for centuries? Is one’s religion a moral indicator of one’s business behavior? Does religion teach these values?

The German sociologist Max Weber had the following observation regarding American salesmanship. He suggested coming to a new town on Saturday, going to church with the locals on Sunday, and then making sales-calls on Monday. Gain their trust through religion before attempting to sell anything.

This advice is still followed in some mega-churches where congregants are encouraged to do business with each other, and frequent each other’s places of business. Is there a necessary connection between worship and moral conduct?

Some argue that because God sees all, even if you get away being immoral in this life, you’ll be punished in the afterlife. For many this idea of heaven and hell keeps them within moral boundaries in the here and now.

What if your faith doesn’t include the idea of an afterlife? Does that mean you necessarily don’t care about morality? Plenty secular businesspeople are moral while being nonbelievers. The marketplace is irreligious. But aren’t our worldly activities an expression of our inner core of beliefs? Isn’t there a direct line between one’s honesty and integrity and one’s conduct in the marketplace?

It’s odd, then, that we demand to know a candidate’s detailed belief system and relation to God—“born again” comes up as a significant statement of faith—when we are willing to ignore it in the marketplace. Do you demand prayer before signing a contract? Do you expect God’s blessing to succeed in business?

What’s going on in the marketplace, as Adam Smith already reminded us centuries ago, is a tacit commitment to moral behavior: we assume everyone is honest, until proven otherwise; it’s a more efficient system than suspecting everyone (and counting 500 sheets of paper).

So, are we moral in the name of efficiency? Is efficiency as powerful as the watchful eye of the Impartial Spectator to keep you honest in the marketplace? Perhaps it’s also common sense: you are bound to encounter the same people over and over again; they’ll remember if you cheated them in the past.

So, efficiency plus memory equals moral behavior in the marketplace. Add to it cost and convenience—do you want to do a background check on everyone?—and you are getting closer to the recipe for marketplace morality. Is religion then necessary?

If by religion we mean moral sentiments, then religion in general and religious mandates and institutions in particular are helpful. But when religion divides, it may interfere in the marketplace.

I recall growing up in Israel when our family business had close to half of its clients Palestinians from the West Bank and Gaza. The Intifada was a financial nuisance, not a political matter. Christian, Jewish, or Muslim, all they wanted was to make a living and support their families—hostilities ruin the marketplace, they all admitted.

We all count on the marketplace to even the odds—when it isn’t manipulated by Wall Street—among moral businesspeople who are trying to prosper under conditions of personal liberty and equal opportunity.

One’s faith is a private matter we can neither buy nor sell. Let’s keep it then out of the marketplace!

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“On the beauty of paying taxes,” The Colorado Springs Business Journal, April 13 -19, 2012, 21.

ON THE BEAUTY OF TAXES

Many years ago, when my sister and brother-in-law opened their training and consulting firm, I asked her what was their goal. “I hope to pay more than $1 million in taxes,” she answered. I thought it was the oddest answer. If the only things we can be sure of are taxes and death, why welcome either? It took me some years to appreciate the wisdom of her answer.

Why do we hate paying taxes so much? There are three main lines of arguments used by militant groups, such as the Tea Party or American for Tax Reform, and other, run-of-the-mill libertarians, to answer this question.

The first, principled, suggests that it’s a question of justice: I deserve to retain what I earn. Any tax whatsoever infringes on my individual rights. The government is taking away something I own.

Though there are Constitutional provisions to raise funds for government needs, such as wars, a uniform personal tax is a much later addition the reasonableness of which remains questionable. Those making this argument also refer to the 16^th Amendment (1913), and suggest that not all states ratified it.

A variant of this argument is aimed at inheritance tax, for example, as an outright theft: I already paid once income tax, why must my heirs pay again for the same earnings when I die?

Nine states have no income tax—illustrating that income tax isn’t necessary to run a state—but charge fees for particular services and have sales taxes.

The second, functional, set of arguments uses a different logical line: federal and state governments are wasteful; if taxes were reduced, they would necessarily have to shrink in size: when starved (no taxes), they will die (a natural death).

The third, applied, set of arguments concedes that taxes are needed for some public goods and services, but wonder what the simplest and fairest system of taxation would be. Progressive taxation—the system we currently have, where the rich pay more proportionately on additional increments of their income—is contrasted with a flat tax system—where everyone pays the same percentage, say 10%, of their income regardless of how much money they make.

No matter which set of arguments appeals to you, think about the social contract: are you getting more benefits out of paying taxes? What if you paid none? What services can you do without?

Should only use-taxes be paid, as Milton Friedman suggested decades ago? If you use the road, pay toll; if you go into a park, pay a fee; if you call the fire department, pay a protection fee. Perhaps this is what the Mafia understood all along, personalizing protection fees, and providing safety nets only for its members.

The focus on reducing government expenditures is always warranted, unless we want to go to wars. Will government agencies necessarily become more efficient if their funding declined? From Reagan to Obama, with or without tax breaks, Republican and Democratic administrations alike have routinely failed to shrink the government payroll: about 22 million currently work for the government (about 16% of the total workforce).

The US Postal Service—a federal agency, lest you forget—is trying to reduce its deficit of $14 billion by $3 billion, focusing on closing facilities and not replacing retirees. But as a federally-mandated public service, it has less flexibility than FedEx or UPS.

Will its size shrink? Will service be compromised? What if it were eliminated? Who’d suffer? Should we care about the few rural residents when the many urban dwellers have alternative options?  

Instead of focusing on taxes as the root of all evil, let’s focus on government waste, locally and all the way to the federal level: when you see waste, call your representatives, write them an e-mail, or suggest alternatives.

Think about what services you can do without: garbage collection, potholes repair, clean air, parks? What are you willing to pay for individually and take away from government control: sidewalks, street lights, health care, food inspection, burglary alarm?

There are those whose defiance of the social contract is more extreme. They belong to the underground economy or black market. Their unreported income is estimated at around $2 trillion annually with an effect of tax revenue loss of about $500 billion, representing about 10% of GDP (of course in other countries, such as Greece and Italy, it accounts for as much as a third of GDP). Would you like to join their ranks?

While you ponder this question, I’ll stay in the social contract, pay taxes and enjoy government services. I still dream of paying $1 million in taxes, consulting the best tax lawyers in town. Would you mind joining my dream?

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“On style and substance,” The Colorado Springs Business Journal, April 6 -12, 2012, 21.

ON STYLE AND SUBSTANCE

When logic was formalized in ancient Greece, it separated arguments from those who made them. Arguments should be tested as valid or not on their own merit, rather than on the credibility of those making them. At times, we forget this simple principle.

The legal system doesn’t help, either. In case after case, lawyers and juries assess the guilt or innocence of defendants not only in terms of the facts, but also on their moral character or that of witnesses. What does good moral character have to do with the fact that someone committed a crime? Does it matter how the defendant dresses to court?

Businesses interview job applicants looking at how they dress, how they handle themselves, as much as they care about their resumes. Should it matter that an employee is unpleasant, even deficient when it comes to hygiene, when assessing job performance?

Perhaps the best way of thinking about this is the famous phrase “all sizzle no steak” as a way to enforce in the marketing world that style always trumps substance: we are drawn by the ad and are disappointed by the product.

It’s with this in mind that we keep on hearing complaints about the style of Mayor Bach which offends some Councilmembers. Are they listening to what he says? Or are they more concerned with how he says it? Would they rather have a friendly, smooth-talking snake-oil salesman than an executive who gets things done?

Not only is the focus on style misplaced, it gives at times cover for substance not to be examined at all. Local church leaders, from the mega-churches in the north of town to small, local ones in the south, are preachers and social workers, ministering to their congregants in finely styled soliloquies. But what are they doing in the public square?

Churches receive numerous local and federal tax benefits, because there is a deep sense of respect for their religious role in the social contract. Would it be style or substance if we ask each of the churches in town to adopt a park in town and take care of it because of shortfalls in city budgets? Is it style or substance when some of them speak out in the public square about poverty and hunger, child abuse and indigent health care? Catholic charities run Marion House downtown—style or substance?

The religious style, just like that of public officials, may be important in retaining civility, ensuring we interact peacefully in the public square. But focusing on style alone may miss the opportunity to have candid and heart-wrenching dialogues about the things that matter most to the good life in our city.

I hear colleagues and acquaintances insist that “he is a good guy” or “she is really nice.” These statements might be true, but they still tell me nothing about their competence and substance: Are we paying them to be nice or to get a job done? I’d readily give up bed-side manners for the competence of a surgeon anytime.

There are businesses, especially hospitality, where style seems more important than substance. Waiters are supposed to be nice and friendly, smile and remain cheerful no matter how rude the customer. But wouldn’t you rather have a waitperson bring you the right dish or drink without a smile than a smiling waitperson screw it up?

Is it a matter of style when the charming, grandfatherly Chuck Murphy, the chairman of the downtown taskforce, and the likeable Steve Cox, the new economic tsar, promote the idea of downtown surveillance camera? Is the substance the police statistics about reducing crime?

Or is the substance different: what is the root of the problem? Is it three Tejon Street clubs where fighting is rampant? So, why not deal with them, rather than suggest turning downtown into a prison-yard with surveillance cameras? Are cameras now stylish?

Is it style or substance when Scott Hente, the Council President, shirks his oversight responsibilities as chairman of CSU or board member of URA?

Is it style or substance when his second in command, Councilwoman Jan Martin, works behind closed doors to appoint her loyalists to task forces?

Is it style or substance when Councilman Bernie Herpin refuses to deal with RBD publicly as its commissioner?

Is it style of substance when Councilman Tim Leigh doesn’t filter his public statements?

The more you think about it, the more you’d agree that we want the steak and care less about the sizzle, that we want to respect our public officials rather than like them as  people. As Easter is upon us, taking stock of the deeper lesson of renewal may resonate with our political leaders: resurrect the core of what should be done without losing your civility with each other.

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“Play nice, Council & Mayor” The Colorado Springs Business Journal, March 30 – April 5, 2012, 21.

PLAY NICE AND BE RESPONSIBLE

Let’s assume that the strong mayor and the nine members of council are here to stay for a while; let’s also assume that the city’s legal team cannot quite sort out their lines of authority. These assumptions do not warrant, in themselves, the kind of childish behavior we have been observing in the past few months. Grow up and try to do your jobs! Otherwise, take your toys and go home to play alone.

This is a city, after all, not the school yard. Instead of figuring out who is right and who said what to whom, instead of laying blame on this incident or that slight, perhaps we should outline our expectations.

Start with the strong mayor: you should manage city administration, oversee the Police and Fire departments, and be the city’s chief promoter. Make the city bureaucracy the best it can be, being both business-friendly and citizen-friendly, treating the taxpayers as stakeholders to whom every one of them is accountable. Whether filling potholes or collecting sales-taxes, all city employees should become models of courtesy and genuine care, ensuring that we are all served fairly and well, and if possible, with a smile.

As for the nine councilmembers: forget whatever you used to do and how you deliberated about every little issue twice monthly. There are professionals who can take care of the day-to-day operations, while you should divide oversight responsibilities among you to ensure direct engagement. Here are nine areas of focus:

1.    Parks and recreation: budgets, facilities, operations, programs

2.    Roads and infrastructure: potholes, zoning, public transportation

3.    Real-estate holding: what is owned, leased, bought and sold, budgets

4.    Tourism and marketing: city facilities and the Visitors and Convention Bureau

5.    Sports (including USOC): bike tours and trails, city leagues, Sky Sox, arena

6.    Utilities (until sold): deep understanding of operations, budgets, and planning

7.    Urban Renewal Authority: site selection, bonds, future planning

8.    Finance and budgets: details of every department needs and expenditures

9.    Education: school districts (consolidated?), higher education, Air Force Academy

If each council member focused on one area and reported monthly to the others what’s going on in his or her area, then everyone would be better informed and make decisions more rationally.

Councilmembers can decide among themselves who’ll do what, as long as they keep the real estate guys away from real-estate matters to ensure avoidance of conflict-of-interest voting (do they recuse themselves now?).

Assume you don’t like these nine areas; please put forth others. For example, should there be one dedicated to the Military or one to the Downtown?  Assume you don’t like one person being the leader in one area, then double up and have two members cover certain areas. This is a minor adjustment compared to nine members pretending to be experts or involved or even knowledgeable about all the areas on which they regularly vote.

This isn’t that complicated from a business stand-point: the CEO oversees everything, but in large organizations delegation of responsibility makes sense. One cannot expect the mayor, strong or weak, to really manage well such a large organization without division of labor and without the collaboration of council.

Just because councilmembers don’t see the mayor as their “boss” for obvious reasons (they were elected to their positions to represent constituents), isn’t sufficient ground for turning this city into a malfunctioning operation that might scare potential newcomers.

Perhaps we don’t want the Chicago Daley model of a strong mayor, but Chicago’s garbage was collected and streets were plowed when it snowed (Jane Byrne served only one term because of snow-plowing problems). Our city doesn’t collect the garbage and rarely plows. So, perhaps our governance model should be different.

We have local experts who might help with this, and I don’t mean the scores of therapists who can help in group therapy to find what ails these ten elected officials. Do we really want to hear about their potty-training or childhood traumas? Let’s hope not.

Instead of psycho-therapists, UCCS’ Chancellor, Professor Pam Schokley-Zalabak, who specializes in organization management, and whose own experience running a large institution that has different constituents (including tenured professors she cannot fire), could be helpful. If she is unavailable, perhaps someone with expertise similar to hers can be of service.

Getting elected is one thing—it’s a beauty or popularity contest of sorts. Being an effective public official is quite another. If any of our Elected Ten wants our respect, they better earn it on the job! Their past got them elected, but it’s the present that we must judge: it’s their work right now that matters to us.

Who knows, if the Elected Ten get their act together, we might rightfully aspire to compete with Austin, Texas and Portland, Oregon as one of those second-tier great cities!

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

  

“Utilities gamble might be community’s loss,” The Colorado Springs Business Journal, March 23 - 29, 2012, 21.

CSU’S GAMBLE MAY BE OUR LOSS

If you can’t take the heat, get out of the kitchen! Chefs know that. Perhaps politicians and public officials should learn from them.

In its News Release of 10/4/2011, Scott Hente, CSU’s Chairman, said “This is great news for our community. NeuStream will save money for Colorado Springs Utilities’ ratepayers because it will be installed at lower cost than traditional scrubbing technology and will require less operating and maintenance expenditures.” Coming from a non-expert who is embroiled in legal disputes, as the Gazette has reported, can we trust this judgment?

This is the same guy whose judgment about the default on the Urban Renewal Authority’s N. Nevada project, according to the Gazette was: “’The deal was good. The deal still is good,’ said Scott Hente, president of the Colorado Springs City Council and an authority board member.” You may dislike Mayor Bach, but at least he has initiated on 2/15/12 an inspection of the URA because of financial concerns. Should Hente resign and take care of his personal affairs? After all, we don’t pay him enough to divest himself from his real estate deals, unlike the salary we give the mayor to focus on city affairs.

This is what we should fear: politicians sanctioning the work of others without warrant. Relying exclusively on reports generated by URA or CSU is like never asking for a second opinion before a major surgery.

Has Hente or the CSU’s CEO fully disclosed that the technology trade-marketed to Neumann Systems is experimental? Does it matter that CSU is a “pilot project” with a $7.2 million award from the DOE? Has anyone been alarmed that about $17 million was spent as of 9/3/10 on this project, and that an estimated $180 million will be spent overall?

CSU’s answer is that without Neumann’s experimental technology $360 million will be spent “to control SOX, NOX and other particulates.” So, it sounds reasonable, even responsible to spend half of that amount on an alternative.

But the question remains: is Neumann’s solution the best alternative? Though promising in many ways, is there no other alternative worthy of $180 million to replace coal-generated energy? 

It’s not that local engineers shouldn’t be consulted. Neither should we eschew local expertise just because it’s local. It is one thing to solicit local advice and quite another to commit large sums of money as a gamble on what might be the greatest success or the worst failure.

Have we heard about the entire process that led CSU to prefer a brilliant local solution over all those available in the world of energy operation?

Xcel, for example, has not chosen Neumann, but is considering a multiple-pronged approach to dealing with EPA requirements, from retiring some plants, retrofitting others, and using different sources of energy. Has CSU’s leadership spoken to Xcel’s executives and solicited their advice?

CSU’s Grossman responded to my inquiries:

“The EPA and the state of Colorado require Colorado Springs Utilities to comply with new stricter emissions control equipment at our power plants by 2016. Using conventional scrubber equipment, the cost to comply would be an estimated $300 million or more. Installing Neumann Systems Group's air purification device instead of conventional scrubbers is projected to save at least $100 million. So far, approximately $40 million has been spent on testing, designing and implementation. Installation is expected to begin in September 2012.”

Though these numbers differ from the CSU’s News Release and CSBJ’s articles quoted above, CSU remains on message: this is a good technology, even if not fully tested. Don’t question us. All we need from Council is a yes vote anytime they convene as our Board.

Lest I be accused again of not accurately reporting the facts, let me reassure everyone that mine are wild speculations whose veracity is open to challenge. Unfortunately, neither Forte nor Hente are forthcoming, so I must stay at the speculative level.

It’s difficult to report facts when CSU stonewalls the public. For example, when asking about cost-savings at CSU in the area of the motor pool, all I could get is a chart dated 11/28/11 about the percentage of vehicle categories, and a report from 1/7/08 by Mercury.

In 2007 CSU had 1,754 “units” whose replacement cost was $74 million. With an average “replacement spending (since 2000)” of $5.3 million annually, who is overseeing this process? One wonders if anyone digs deep down this rabbit-hole to make sure that a 10% saving on this “average” may be achieved. Perhaps it’s done, but how would we know?

Last time we trusted officials in large institutions without political or regulatory oversight, we got the mortgage bubble. Let’s pray we don’t face locally an energy-rate bubble.

Raphael Sassower is professor of philosophy at UCCS and is still waiting to meet with CSU’s CEO Forte or Chairman Hente. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“Warren Buffett and our Regional Building Dept.,” The Colorado Springs Business Journal, March 16 - 22, 2012, 17.

BUFFETT WEIGHS IN ON POLITICS

Warren Buffett is super-rich, one of our American billionaires who is ready to leave the stage. As he’s planning to depart, he has given the Melinda and Bill Gates Foundation the responsibility of disposing of his billions for good causes. Delegating is an art, not a science, and Buffett seems to be masterful at finding expertise where he needs it.

So why weigh in on political issues? Why make headlines about paying a tax rate lower than his secretary? Why go public with what seems to be his private business? Why expose himself in a way that the millionaire Mitt Romney has shunned for months?

Perhaps the master investor has figured out that presidential election are more of a side-show at best, and at worst a way to expose the ugliest of what our country stands for, with mud-slinging and unfounded accusations, appeals to religion rather than the Constitution, and overblown concerns with abortion rather than health care reforms.

Perhaps he’s figured out that presidents come and go, maintaining a status-quo set up by a huge D.C. bureaucracy that runs its own course. Presidents—Republicans and Democrats alike—end up powerless against Congress. There is a reason why Congress’ approval rating is so low that in some polls it’s in single digits: it has become a dysfunctional institution.

So, Buffett sent out a letter offering his “Congressional Reform Act of 2011.” It’s fairly simple, and if implemented could change the course of American politics, bringing it back to the vision of the Founders who believed that representatives should meet for short periods of time annually to legislate. Here’s Buffett’s agenda:

“1. No Tenure/No Pension. A Congressman collects a salary while in office and receives no pay when they are out of office.

2. Congress (past, present & future) participates in Social Security. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.

3. Congress can purchase their own retirement plan, just as all Americans do.

4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

5. Congress loses their current health care system and participates in the same health care system as the American people.

6. Congress must equally abide by all laws they impose on the American people.

7. All contracts with past and present Congressmen are void effective 1/1/12. The American people did not make this contract with Congressmen. Congressmen made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term’s, then go home and back to work.”

Straightforward as this seems, no ground-swell support is seen anywhere. We grumble and complain, despise our professional politicians for the special conditions of their employment, health care, and their retirement benefits, but they snub us all, remaining detached from the constituents they are supposed to represent.

Moving from the national level to the local, one wonders why our local millionaires—and there are quite a few of them here—aren’t as outraged as Buffett or as forthcoming with suggestions to reform our local political bastions of power—bureaucracies without supervision. Some do get involved, but not enough.

RBD’s leadership, Sharon Brown, chairwoman of the commissioners and Fountain City Councilwoman, vice chairman Dennis Hisey who is El Paso County Commissioner, and Bernie Herpin who is CS Councilman, has refused to respond to the questions posed in writing on 1/12/12 and published in the CSBJ on 2/17/12.

Obviously RBD is not accountable to anyone. Its organizational chart is still a secret only these commissioners know but refuse to divulge to the public. And here we are, trying to lure businesses to our town, but they won’t be able to refurbish spaces or pull permits because the commissioners won’t let them know who they should approach. Maybe a contractor will whisper the secret to their ears (for a fee), maybe not.

Unlike the RBD, and for that matter MHS and CSU, the Fire Chief decided to put together a task force to find “Business/Broker Solutions for 2012.” Chief Brown and Fire Marshal Lacey are trying to be business-friendly, forward-looking. Two RBD representatives were at the first meeting—nice and conscientious individuals who care about the city but remain politically powerless.

It’s not that RBD employees are not wonderful professionals who want to do the right thing; it’s that their bosses are unresponsive to the public, careless at best and negligent at worst, snubbing the same public these employees are trying to serve.

Raphael Sassower is professor of philosophy at UCCS who is still waiting to hear back from RBD’s three commissioners. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“CSU should follow Memorial’s fate,” The Colorado Springs Business Journal, March 9 - 15, 2012, 21.

CSU SHOULD FOLLOW MEMORIAL’S FATE

Just as the recalcitrant Memorial’s CEO, Dr. McEvoy, thought his ideas were the only ones worth listening to and never expected his imperial visions will evaporate before his very eyes, so CSU’s CEO, Mr. Forte, may be dreaming that his empire is beyond reproach. Wake up and smell the roses!

With public scrutiny now finally at professional levels, as the city has enlisted expert lawyers to negotiate on its behalf the transfer of Memorial to UCH, it has become clear that selling the hospital is the right choice among many others that were available. We, as a city, can have our cake and eat it, too: enjoy the benefits of a first-class health care service (underwritten in part by the billionaire Anschutz) without liabilities and an incompetent leadership team and supervisory board.

If we were worried about what to do with Memorial (around $600 million enterprise), why aren’t we worried about what to do with CSU (around $1.1 billion enterprise)? The same incompetent board that supervises Memorial is still supervising CSU. Despite the recommendation to install an independent board, this monolith has got to go!

Just as Memorial was run by a provincial leadership that scared us into thinking increased health-care costs would ruin the hospital and leave us without proper care, so does CSU pretend that its leadership, and even ownership, can never be different from what it is.

Why not put CSU out to bids and see what happens? By now even our confused Council can figure out how to handle such an offering, with all the legal guidelines that have been set in place for MHS to solicit bidders. There are companies out there, from Xcel on one extreme of the private spectrum, to RISI on the other extreme of non-profit regional utilities, who might be interested.

Yes, we need to set a task-force and finesse the nuances of negotiations; yes, we need to have people with integrity serving on it for the right reason; and yes, we need to see that our future liabilities regarding pollution and any toxic waste associated with any of the power plants will be cared for by the new owners.

So, what’s holding us back? Is it a bureaucracy that fears losing its grip on wages and benefits, pensions and other perks? It can’t be that petty. Or is it? What is so special about a municipality that owns its utilities if rates go up while services decrease? What’s so special about CSU that warrants keeping it city-owned?

Perhaps it’s a lethal combination of pride, tradition, and inertia, lethal because it has no warrant, no rationale. Until we try to sell CSU we wouldn’t know if we can get a deal better than the one we currently have. Nothing ventured, nothing gained, as the saying goes. Our local rates are definitely higher than those offered by Xcel Energy in Denver and in Summit County, as local citizens who have second homes report. So, this argument doesn’t hold.

The big management questions about CSU haven’t been answered yet. Who oversees this huge organization? What is the competence of top management at CSU? Is its CEO qualified and up to the task (still waiting to see his resume)? Rumor has it that he won’t just retire, but has another job waiting for him (with whom?). Will an “independent advisory board” make any difference, as long as legally oversight responsibilities remain with Council?

There are other big operational questions that need to be answered as well. Why is CSU still using coal, an energy source that might be cheap up front but very expensive in terms of pollution and EPA guidelines that must be adhered to? Is the so-called Neumann solution for filtering after burning coal not backwards (more on that in a later column)?

Shouldn’t we worry about replacing coal with gas or biofuels and then not have to deal with this kind of pollution at all? Are we stuck using 20^th century equipment in the 21^st?

Likewise, one wonders if all the resources available to operators, like CSU, have been exhausted. Given the global economy (see my last column), has CSU consulted all potential solutions to providing energy for the future?

For example, regardless of alternative energy sources, have equipment efficiencies been considered? We have Sturman Industries up the pass in Woodland Park: can they help make the equipment 10-30% more efficient as they have done for major trucking companies?

Should we have one centralized source of energy with an expensive grid and potential for failure? This is where national security concerns (of sabotage) merge with the concerns of the Sierra Club (of ecological preservation).

Raphael Sassower is professor of philosophy at UCCS who is praying CSU doesn’t turn off service to his buildings. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

 

“The global economy and local stress,” The Colorado Springs Business Journal, March 2 - 8, 2012, 21.

GLOBAL ECONOMY, LOCAL STRESS

There are those, like Thomas Friedman of the New York Times, who want us to get over our economic gripes about outsourcing, and realize that by the twenty-first century things are “Made in the World.”

Forget about where something is made, and get used to the fact that the global economy is here to stay: whoever provides the cheapest labor force or raw materials is chosen. Whoever responds to a call for proposals, architects from Germany or interior designers from Brazil, is competing with the entire world, regardless of the target location.

In the Digital Age, physical or geographical location means nothing: any set of ideas or designs or drawings can be digitally transported across oceans and mountain-ranges in seconds. The Internet has connected us not only socially, but also professionally and financially. Experts can bid from anywhere to perform tasks anywhere they are needed.

I met a physician in South Africa that was reading and interpreting MRIs and X-Rays for hospitals in the United States. Her services were rendered during the day (her time), while it was night-time here. Isn’t this efficient? Doesn’t it solve our fast-pace hunger for immediate responses?

There are others, like Joseph Stiglitz, winner of the Nobel Prize in Economics (2001), who is concerned about the optimistic view of globalization. For him, there is a fundamental asymmetry between the developed and developing countries, such that the kind of policies imposed by the former on the latter would cripple any potential benefits that could come from “the removal of barriers to free trade and the closer integration of national economies.” What is good for Germany may not be good for Egypt or even Greece (as we have recently seen).

National differences are easily observed in the laws countries enact, from tax codes to zoning and labor safety. Simply expecting the same rule of law across national borders is a folly: different cultures have different beliefs and ideals they enshrine in their laws.

It’s not that the Chinese refuse to abide by Western intellectual property laws; it’s that they have ancient traditions that find personal ownership of ideas quite perplexing. The idea that some can copyright an idea is foreign to them. And the Indians think of the legal system as an ongoing conversation whose interpretive flexibility would be dumbfounding to American lawyers.

When Adam Smith encouraged us to think in terms of the division of labor and added foreign trade as a source of national wealth (1776), he couldn’t have imagined current globalization trends. For him, trade was supposed to enrich all parties, rather than some at the expense of others. But as we look around us, we feel impoverished at the expense of Chinese and Indian ascendancy.

A befuddled President Obama was chastised by the late Steve Jobs about Apple’s labor practices. Jobs was clear in asserting that 20,000 overseas jobs (plus around 700,000 subcontractors in Asia and in Europe) “were not coming back.” Wake up, this is the real world, and not fantasy American labor-land (with about 43,000 Apple-related jobs)! But we want to make things here: we want factories to work three shifts a day, employing skilled labor at reasonable wages, the way it was a century ago.

Is the American dream of manufacturing over? The car industry is proving otherwise, with record profits at GM, Ford, and Chrysler, and added jobs from Michigan to Tennessee. Yes, two of the three got bailout money. But unlike the banks that got much more, this industry added jobs over time. While banks reduce their workforce to become more profitable, robotics on assembly lines still require human labor.

The sanctity of Jobs’ legacy should come under closer scrutiny when it comes to profiteering from cheap labor abroad while Americans are the main target consumers. Does Apple have a moral obligation to employ Americans rather than exploit Chinese workers at Foxconn? Should Apple care about the economic well-being of America? Should it sacrifice a lower profit-margin to sustain the health of the local economy?

This may sound xenophobic, even protectionist; it may sound contrary to classical economic principles of capitalism and even of communism, where the laborers of the world must unite. Instead, this is meant as an urgent reminder that the fruits of a global economy may turn out to be sour at the end.

Bud and Sam Walton would turn in their graves, unlike Jobs who didn’t care, if they knew that Wal-Mart employees can’t afford to buy the items sold there. Their efficient distribution genius wasn’t intended to increase joblessness in America and create a permanent unemployed class.

Capitalism’s dream was to make everyone more prosperous, not to make some richer at the expense of others. Can we revive the dream?

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com Previous articles can be found at sassower.blogspot.com