Saturday, October 29, 2011

No-bid naughtiness: the details so far….

You’ve probably already forgotten, and frankly, we wouldn’t blame you, that we introduced this subject here.  And then we teased you to be ready for a follow-up here.

We’re now ready to provide that follow-up.  Our only reason for the delay is that we were busy enjoying life, if you don’t mind us doing so.  We visited North Jersey, where we were born and raised, to visit our daughter and family, who relocated there in recent months.  And to join in a partial family reunion in the Lancaster, PA area, heart of Amish/Pennsylvania Dutch country.  It was an enjoyable and rewarding several days.

Back to business; we promised we’d update you with specific information once we had it, and here we come.  We also need to tell you that the activity level in this subject area is far higher than we had anticipated.  As so often happens, once you start looking into things, new insights and information start coming your way.

Before we report on what we’ve found, you might want to read this article: teacher's health insurance.  Serendipitously, we got the link from a friend; it’s ‘right in the wheelhouse’ of our discussion, and you should find it illuminating.

As to specific information, here’s what we have so far:

Brunswick School Department insurance figures, provided by their Finance Director, are as follows:

Total: $4,805,000, of which $4,430,000, or 92% goes to MEA coffers, and 3.4% goes to the MMA.  (MEA is the Maine Education Association – the state teacher’s union; MMA is the Maine Municipal Association – the state ‘union’ of municipal governments.)

Employee Medical $4,430,000; from MEA benefits trust; these are ‘public funds only.’  Employee contributions for medical insurance are $533,154 in addition to employer share  of $4,430,000.  In other words, total funds to the MEA for Brunswick school department employee health insurance are a shade under $5 million.

Employee Dental $150,732; from Securian.

Workers Compensation $136,934; from MMA.

Motor Vehicle  $7,595; Kyes Agency, Farmington.

Liability  $19,985; Kyes.

Property Casualty  $60,024; Kyes.

Let’s extrapolate those figures to statewide totals.

Brunswick has less than 2500 students, in a state that  has about 180,000 total.  If the per student payments to the MEA and MMA were equal state wide, the school departments would be spending a total of nearly $360 million on insurance with the MEA, and $9.8 million  with the MMA.  Here in Brunswick, we’re sending the MEA about $2,000 per student on employee medical alone.

Wow times twenty! 

On the municipal side, here are the figures:

MMEHT – Health Insurance - $1,646,576.79 of which $1,332,621.00 is paid by the Town of Brunswick, and the remainder paid by employees.  (This is the health insurance program run by the MMA.)

MMA Worker’s Compensation Pool - $183,032.83 all paid by the Town of Brunswick.

MMA Property & Casualty Risk Pool -  $156,654.30 all paid by Town of Brunswick.

(Everything else is down in the noise for or purposes here.)

Summing up, from what we know, our municipal government spends about $2 million on insurance annually with the MMA.  If Brunswick is typical, the MMA does about $140 million in total insurance business state-wide.

Based on figures we’ve seen in recent years, this insurance business yields about $8 million in excess revenue (“profit” in business terms) for the MMA.  If the MEA has the same ‘profit’ margin, their insurance business would turn a ‘revenue excess’ of more than $20 million.

In both cases, since neither is a public corporations with stockholders, these profits are available for use as the organizations see fit – most typically, in partisan political activism and lobbying efforts.

These figures set the stage for examining activity in the Maine legislature in recent months.  Two bills have been passed and signed into public law that address the conduct of MEA insurance operations.

The first began as LD 1326, “An Act To Allow School Administrative Units To Seek Less Expensive Health Insurance Alternatives.”  You can find the status summary for the bill here.  If you do, the most important thing to note is that the bill passed on a largely party line vote.

The law, as passed, is not a mandate of any sort; it simply requires that school districts be given access to claims experience information they need to pursue the option of competitive bids for health insurance; information that the MEA and their selected insurer have been able to legally withhold in the past.

The second bill, which began as LD 404, also became law, and is entitled “An Act To Assist School Administrative Units In Providing Health Insurance to Their Employees.”  In basic terms, this law requires that school department administrators seek competitive bids for health insurance for their employees at least once every 5 years, rather than being permanently locked in to the MEA statewide plan.  Pretty radical stuff, huh? 

According to reports we’ve received, the MEA devoted considerable effort to lobbying against these bills.  They were unsuccessful, as the new legislative majorities were supportive of competition as a fundamental method for delivering best value for taxpayer dollars.

This did not sit well with the teachers’ union, and the MEA is therefore pursuing further legal action to have the laws overturned.  You can read about it here.  This press release reads, in part, as follows:

Maine Education Association Challenges New State Health Care Laws

10/14/2011 03:23 PM ET

The MEA's Health Benefit Trust, which covers tens of thousands of Maine educators and their families, contend that the new laws will weaken its system.

The Maine Education Association's Health Benefit Trust is challenging two new Maine laws it says will weaken the system that covers tens of thousands of Maine teachers and their family members.

The Health Benefit Trust filed a suit in federal court Oct. 12 aimed at blocking the implementation of LD 1326, which requires the Trust's insurer, Anthem-BlueCross and Blue Shield, to release the claims history or "experience rating" for any school unit that requests the information.  (Oh the horror!)

In addition, the MEA's board of directors has authorized a legal challenge to LD 404, a new law which requires the Health Benefit Trust to use a competitive bidding process and to create a lower-cost insurance option by July 1 of 2012. 

The full statement is loaded with the equivocation and stereotypical rhetoric of politically protected special interest groups; we choose not to confront you with all of it, lest you suffer gastric unrest.  But you can go for the full Monte if you wish; just click on the link above.

Hence we come to this: what is our point in discussing all of this? 

Lacking anything more compelling, we suppose it’s to ask these questions:

1) Why would one party join forces with a special interest, very powerful union, to block ordinary taxpayers from being able to access the benefits of the competitive open market?

2) Why would the Maine Teachers’ Union be so willing to go to the mat, and invest big lobbying dollars, to protect their established monopoly in school department health insurance coverage?

The questions, we believe, answer themselves.  It’s to make sure the union can keep funding THEIR sons-a-bitches, in order for them to maintain privileged status over ordinary tax-paying citizens who are tired of more money in education buying less and less in the way of results.

When will you conclude we’ve had enough?  With all the news breaking lately on favored interests getting their way, how much longer do you think we can endure this flagrant abuse of common sense and the true public interest?

Wednesday, October 19, 2011

We simply have no room to cut….

On Monday, we spoke about big government excess, speculation, and moral hazard, among other things.

Care to see the numbers associated with these concepts?  Give these a look-see:

The table is from this article:  A New Spending Record

It’s our view that these clearly destructive and unsustainable numbers are in large measure due to government speculation dripping with moral hazard:

  • Speculation that massive increases in food stamps will eradicate poverty. 
  • Speculation that huge increases in unemployment insurance will increase employment. 
  • Speculation that mortgage rules that encourage the unqualified to buy a home, and then when they fall off the cliff, that mortgage subsidies will somehow make them qualified. 
  • Speculation that car companies that are no longer viable can be made viable with government subsidies. 
  • Speculation that otherwise non-viable alternative energy approaches have only failed because the right people were not encouraging them with other peoples’ money. 
  • Speculation that federal money to pay for teachers, policemen, and firemen, historically locally funded, will not cause a crisis when the money runs out. 
  • Speculation that big money firms that have no chance of long term success will succeed if only the government subsidizes them. 
  • Speculation that capitalism is a failed system, and that collectivism, which has a dismal record, can suddenly become workable and sustainable, and generate more wealth.
  • Speculation that pork distribution trumps responsible governing.

And these people say that cutting a measly few percent from these budget levels is virtually impossible, and would cause needless suffering?

The really sad thing is that the nearly billion dollar mistake that is Solyndra doesn’t even make round off error scale in figures this big.

Think about that: a billion dollar boondoggle that doesn’t even reach the level of ‘a drop in the bucket.’

BA, BVA.  (can you guess what these stand for?)

Monday, October 17, 2011

Solyndra: the moral hazard of big government excess, corruption, and corporate cronyism, not to mention ‘fair share’ duplicity.

Our lavish spending big government is afflicted with a multitude of pathologies that threaten the core founding principle of ‘self-governance,’ and hence the American experiment.  There may be no finer exemplar of the phenomenon than the recent Solyndra fiasco.

This is, we believe, a critical teaching moment.

Do you know what moral hazard is?  And how it relates to ‘Other Peoples’ Money?’

We began to hear ‘moral hazard’ in common usage just a few years back, and although the words ‘moral’ and ‘hazard’ are simple enough in meaning, we weren’t sure what they meant when joined together.

‘Moral hazard’ is easily illustrated by the rental car business.  When someone rents a car from Avis, or Hertz, or whomever, they are not likely to have the same sense of responsibility for the rental car as they have for their own vehicle.  “Hey, it’s not my car!”  “Floor it; let’s see what it will do; hell, it’s just a rental car!”

In other words, moral hazard exists when two parties to an arrangement have widely different personal stakes in the deal. The concept of Other Peoples’ Money dovetails perfectly with the idea of moral hazard.

To expand on this further, here are two principles we’ve posted before, each from a publication of the Mackinac Center for Public Policy:

1) What belongs to you, you tend to take care of;
what belongs to no one or everyone tends to fall into disrepair.

If you think you’re so good at taking care of property, go live in someone else’s house, or drive their car, for a month. I guarantee you neither their house nor their car will look the same as yours after the same period of time.

If you want to take the scarce resources of society and trash them, all you have to do is take them away from the people who created or earned them and hand them over to some central authority to manage. In one fell swoop, you can ruin everything.

(The best example we can think of locally is how the schools are allowed to slip into deferred maintenance status in favor of rising salary and benefit expenses, and ‘suddenly’ become a crisis.)

2) Nobody spends somebody else's money as carefully as he spends his own.

Ever wonder about those stories of $600 hammers and $800 toilet seats that the government sometimes buys? You could walk the length and breadth of this land and not find a soul who would say he’d gladly spend his own money that way. And yet this waste often occurs in government and occasionally in other walks of life, too. Why?  Because invariably, the spender is spending somebody else’s money.

When you spend other people’s money to buy something for someone else, the connection between the earner, the spender and the recipient is the most remote — and the potential for mischief and waste is the greatest. Think about it — somebody spending somebody else’s money on yet somebody else. That’s what government does all the time.

Nobody — repeat, nobody — spends someone else’s money as carefully as he spends his own.

(Add quid-pro-quo to the equation, as in campaign donations in exchange for favors, and the danger increases exponentially.)

Now on to the Solyndra file.  In a nutshell, this case brings into play the wealthy, non-profits, fair share, SOBs ne plus ultra, and all the rest.  In other words, all the wondrous things that have dominated public discourse in recent months, and much of the recent posting here on Side.

Oil magnate George Kaiser: "There's never before been more money shoved out the government's door in world history."

Here are two articles you should read:

Solyndra and a Billionaire’s Guilt Trip, and The Solyndra Economy.

Cutting to the chase, what these articles reveal is:

  • Billionaire George Kaiser, who feels a profound sense of guilt for his circumstances, but nevertheless has his family’s fortune set up in a non-profit foundation, which minimizes tax exposure for their vast wealth.
  • The Kaiser family fortune derives from oil, the morally depraved energy source that is the villain in the solar/green/renewable energy phantasmagoria.
  • Even though paying his ‘fair share’ seems not to be a priority, Kaiser has visited the Obama White House 16 times, or on average, every two months or so.
  • The non-profits’ funds are staged in such a way as to be the primary private stake-holder in the failed Solyndra gamble.
  • Willful irresponsibility of the administration in matters of due diligence on giving taxpayer money to Solyndra, and allowing said funds to be put in a lower position than private funds should bankruptcy occur, which it has.
  • The benefits of having your Son of a Bitch being the SOB ne plus ultra.
  • The rampant corporate cronyism practiced in the highest levels of our government.

In a word, the absolute moral bankruptcy of government when it goes so far beyond its legitimate boundaries as to be out of control.  Frankly, the more we think and write about this, the more we are at a total loss of words to express our concerns, and more so, our outrage.

As we said some days ago, be afraid, be very afraid.  We certainly are.

Summary: Speculation vs. Investment

Just the other day, we heard a news report about oil speculators.  Surely you remember them. 

Gasoline prices at the moment are roughly twice what they were three years ago.  When the prices began to rise after the new administration took office, the increases were blamed on greedy and irresponsible private sector ‘speculators.’  Meanwhile, government at both state and federal levels repeatedly told us about the need for taxpayer ‘investments’ to restore economic growth from the doldrums of “the great recession.”  No matter how much it might cost.

The recent report from the CFA said that oil prices now would be between $60 and  $75 per barrel if not for the effects of speculation in the worldwide oil market, which has resulted in 2011 prices of $80 to $100 per barrel.

As we reflect on the speculation in the public sector, that being government, particularly as exemplified by Solyndra and similar wildly unsuccessful uses of other peoples’ money, we are troubled by a nagging question.

Just how much of an effect has government speculation, which necessitates reckless printing of money and lavish issuing of debt instruments, had on the price of government, as reflected in taxes, inflationary loss of purchasing power, and the personal share of the national debt we and our progeny all carry on our shoulders?

And how much lower could our taxes be, and how much more our dollars worth, if not for all this reckless speculation in the name of political cronyism of the vilest sort?

By comparison, those who invest in oil futures look downright innocent, if you don’t mind me saying so.  Somehow, when you’re operating with your own money, not that of anonymous others, and you aren’t looking to guarantee your re-election, things seem much clearer. 

And almost childishly innocent by comparison.

Today’s chuckle: do you know who you are?

The recent post about school board members who have to hire consultants to tell them ‘where the schools are today’ reminded me of the old joke about a senior executive business traveler.

In such situations, frequent travelers at the highest status level with a given airline expect special treatment, especially when checking in and boarding.  Matters are only worse when the traveler considers himself a ‘celebrity’ of some sort.

The story goes like this.  The traveler arrives at his gate at the airport, seeing a long line at the ticket counter, and with no special services position open.  He pushes his way up to the front of the counter and demands that he be given the service he expects.

The ticket agent tells him to get in line, and that he’ll be well taken care of when he waits his turn.  Infuriated, the traveler comes out with the classic ‘do you know who I am?’

‘No sir,’ the agent replies, and quickly grabs her public address mike.  ‘Attention please; we have a traveler at the podium who does not know who he is.  Would anyone who can help him figure out who he is please come to the podium?  Thank you.’

‘Hopefully sir, someone will come find you and tell who you are.’

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Saturday, October 15, 2011

The Price Is Right, Brunswick version…


School consultants, COME ON DOWN!  It’s your turn to play The Price Is RIght!

Amazing sometimes how things happen in streaks.  Just a few days ago we posted on the subject of Brunswick schools and the worthiness of consultant services they’ve funded in recent years.

Then just this morning, as the Poppycocks were taking their breakfast at a local dining establishment, we came across an article  heading down the very same track.  It contains thoughts that are just too amusing to let slide without passing them along to loyal readers, who are always looking for a good laugh. 

As often is the case, the usual suspects seem always ready to stand up and prove our points.  Let’s begin with this:

The School Board ……. is seeking requests for proposals from consulting firms to create a five-year plan for the School Department that will describe where the schools are today, document where various stakeholders would like to go in the future, and provide ways to measure progress towards those goals.

Savor this language slowly….let it brighten your day.  It’s not clear if this is the reporter’s language alone, or whether she simply took notes as she heard the words uttered by a school department official.  To begin with, though, we think the School Board should seek proposals, rather than ‘requests for proposals,’ which is what you issue when you seek proposals.

But it really doesn’t matter.  I’m convinced that with only a few hours effort, I can easily document where the schools are today, and I'll even throw in photos and maps.  As to where they might go in the future, let’s get real here; how many other locations around town could accommodate them? 

Few as the choices obviously are, we’re convinced it will be a piece of cake to measure the progress as the schools are moved from where they are today to where they might go in the future.  It’ll be easy enough to do by following them as they move and taking pictures. Should things begin to get out of hand, we can always hire a helicopter with an eye in the sky to record the trip.  Modern day technology will make it easy to measure the progress; can you say GPS?

Here’s another little tickler:

She (the Board chair) said every year the board asks itself what to spend money on, and the answer is usually dictated by how much money is available.

So I said to myself, self……

Seems the Board is thinking about spending $25,000 on consultants for this effort, which probably won’t draw much interest.  So we should have a good shot at the job, charging, oh, $200 an hour or so, which will only cover our expenses and leave us with no-profit, allowing us to maintain our editorial purity.

Time to finish up on our little flight of frivolity.  We’ll close with this whopper from another board member, which nearly had us coughing up our bagel and lox; only a nearby flute of champagne saved us:

"I just want everyone to understand that the town of Brunswick has in fact spent an exorbitant amount of money and time to create exactly what we’re talking about here tonight ... and nobody pays any attention to it…."

The funny part is, based on what we described about past consulting services funded by the School department a few days ago, we’d all be better off if nobody paid any attention to what they submit.  Which might suggest not bringing them aboard in the first place.

Present company excepted, of course.  Because we’re very good at consuming all the money that is available when that is the first priority.


No-bid naughtiness – a heads up

Earlier this week, we posted on the insurance operations of the Maine Education Association (the state teachers’ union) and the Maine Municipal Association, and what we believe to be a wide-spread no-bid relationship between these ‘organizations’ and the school departments and municipalities that procure their insurance from them.

We suggested that there may be opportunities for reaping significant savings by competing the coverage in the open insurance market.  While this thought has been in the back of our mind for some time, it was only by chance that we decided to address it now.  We promised we would gather some more data and report back, and if things looked promising, to pursue further action in the matter.

Well, wouldn’t you just know it; there has been some significant legislative interest in the subject this year, and it illuminates the political interests and sensitivities of the insurance operations.  Which is to say that who holds the majorities makes a big difference.

Once we conclude our look into things, we expect to post some eye-opening results.  Unless we get sidetracked, that should be within the next two weeks.

So stand by for some ‘education’ from your local non-profit wannabe reporter.

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Friday, October 14, 2011

Great schools? Like most things, it’s all relative…

As long as we’re on the subject of ‘great schools’……you were, weren’t you?, because that’s the subject on our editorial mind right now…..we thought we’d pass along some illuminating data for your edification.  Or should we say education;  we must be ever mindful of our lust for non-profit status, as we mentioned a few days ago.

Brunswick has more than enough voices, parents and otherwise, chanting the ‘Brunswick has great schools’ mantra.  A ‘first response’ from inquiring minds should be, ‘compared to what?’

And so we report education statistics we just acquired that are most troubling, especially on a global basis.  Here they are, and none of them are going to elevate your spirits:

  • The US Ranks 27th among the nations of the world.
  • We are only graduating 79% from high school.
  • 20% entering the UM system need remediation before beginning college work.
  • 54% entering our community college system need remediation.
  • 20% graduate from college after 4 years, and 48% after 6 years.

The figures above come from our state Department of Education.  We find them most troubling, particularly those associated with remediation upon college entry.  You would think those entering college are the ‘better prepared’ of our high school graduates.  If this large a percentage are not ready going in for college work, what are we to infer about our K-12 systems?  What about those not choosing college?

Are we granting a High School diploma to anyone who puts in the seat time, regardless of whether they’ve earned it?  Are we inflating grades?  Who are we kidding with policies that allow such cavalier system performance?

To make matters worse, if you’re thinking Maine leads the nation in education, think again.  According to national studies on the subject, we rank 15th, with a C- grade.  You can view the comparative results here:

Great schools?  Looks more like our schools have great public relations campaigns, and ready and willing spokespersons. 

You can decide which makes for a better adult life.  And whether it’s time to demand better of our government schools.

Especially if you believe ‘the children are our future,’ because if they are, we should start acting like it.  And if you think more money is the answer, our little discussion is over.

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Wednesday, October 12, 2011

School enrollment continues to defy consultants and schoolie talking points; go figure!

Editorial note to those who plead “the children are our future:” ‘the future ain’t what it used to be….’ 

And in a related story, shocking as it may be, those ever-present, expert consultants may not be much good for anything but telling you what you want to hear.

Dateline Brunswick, Wednesday October 12:  We have it on solid authority that the Brunswick School Department will report total current enrollment of 2,456 to the Maine DOE this week.

That’s down about 900, or 27%, from pre-base closure days.

Significantly less than expert consultants would have had us believe.  In more than one elaborate study following announcement of base closure, at who knows what cost, they noted our military dependent enrollment was 660, or at that time, 20% of the system total.  We’ve lost the Durham tuition kids, of course, but that wouldn’t account for the difference.

But no problem, because the consultants asserted the loss of military students would be at most a temporary blip on the radar screen; we’d soon be swimming in student growth to replace the military kids.  And our local “Brunswick will continue to grow” chorus was right there to back them up and keep the Kool Aid pitchers full.

The consultants did have a problem as to the specifics.  Unable to make up their mind, or plan a decision, the seers at Planning Decisions gave us a choice of three different ‘models’ for future enrollment.  For the current school year, those models predicted 2,974 (518, or 21%, beyond reality), 2873 (417, or 17% above reality,), and 2704 (248, or 10% over reality.)

Curiously, PD concluded that no matter which model we chose, the enrollment totals in 2016-2017 would magically, divinely, be exactly the same: 2927.  Not only that, but the three components of the total: K-5, 6-8, and 9-12, each ended up at precisely identical numbers no matter the model chosen.  On its face, this alone should have been reason enough to summarily dismiss the entire study, and to refuse payment.

This inexplicable long term outcome is equivalent to saying it doesn’t matter which route you take to go from here to Louisville, KY, because in the end, the mileage and driving time will be identical.  Unless, that is, the consultants were simply echoing the outcome someone in authority told them they wanted.

Based on results over the years, we shouldn’t be condemned for beginning to think consultants are the castoffs and dregs of other professions.  How the hell do outfits like this survive in the marketplace, except for the benevolence of OPM spending ‘officials’ unwilling or unable to do the work on their own, and looking for suitable covering for their tuchus?

Like it or not, evidence is clear that the town, the region, and the state are fundamentally bleeding people, especially young people.

In spite of rosy ‘repopulation figures’ for McKeen St. housing, and how the schoolies declared this ‘affordable housing’ would flood our schools with new students.

In spite of Ostrich articles claiming Stowe school enrollment is exceeding expectations, and pronouncements that enrollment in other schools is ‘right on track,’ even if the ‘track’ isn’t the one consultants said we were on.

In spite of glib assurances from local real estate mavens and parents at this year’s budget hearings that “people move to Brunswick because of our great schools.”  As we wrote then, on what basis is such greatness claimed?

We suspect, frankly, that school ‘greatness’ is akin to the sons of bitches theory we advanced several days ago.  Politicians are all SOB’s except for OUR SOB.  By the same token, “it’s all the other schools that are underperforming; OUR schools are GREAT!”

This latest enrollment report raises cost per student by another $564 a year compared to the figures this time last year, and more than 10% in the last two years, even with schools being closed, and a new ‘more efficient school’ carrying much of the elementary load.

Maybe those 100 folks projected to be coming to town every day on the Amtrak will be school children who could help reverse the tide of student losses.  Oh wait; it looks suspiciously like train passenger estimates might not be quite as high as originally thought; see previous post.

With a little encouragement, maybe one of these days reality will sink in: Maine demographics show a death spiral.  Yesterday ‘the county,’ maybe tomorrow, the Midcoast.

Perhaps the usual suspects should consider getting on the bandwagon heading away from managing our demise, and heading towards seeing there is a future for Maine’s people, and people for Maine’s future.

Instead of worrying about creating national parks and stopping ‘massive development.’  Yah sure.  That’s the number one problem facing Maine.

But there is good news to report.  Kool Aid continues to fly off the shelves in Brunswick. 

So for those of you so-inclined, the Kool Aid lamp is lit; drink it if you got it.  And try not to spill any, because it can stain the pristine public ways in Fantasyland, and we can’t have that.

Oh, and one more last thing.  If officials would simply tell Side what they want to hear, we’d be happy to provide it in document form for a price well below that of prevailing GoCoInCo rates.

And you know you can trust us on this, because we’re not like all the others.

Well, if you can’t take a joke…..

OK, we were only kidding about that parking garage!

We remember some years back when Jim Ashe, erstwhile Brunswick School superintendent, decided to employ some ever so helpful members of the Government Consultant Industrial Complex to prepare applications for state funding to replace one or more of our schools.  At a council meeting, he told all assembled that he wasn’t proposing or planning to build a new school, ‘but just wanted to see it state funding was even a possibility.’

We didn’t recognize Kool Aid as quickly back then as we do now, so his explanation was taken at face value.  Big mistake.  He knew full well that if any of the applications were approved, it was a political certainty that town folk would be powerless to stop the tsunami of “it’s for the children” publicity oozing from the schoolies. 

Once an application was sort of approved, we heard it all. “We can’t turn down a ‘free’ school; that would be crazy;”  “if we don’t take the money, someone else will just get it; it won’t save anything;” etc. 

What a snow-storm descended upon us.  It didn’t hurt, of course, that our own Johnny Richardson (remember him??) was then a major power in the legislature, and prepared to ‘help’ our application succeed.  We seem to recall there was an unexplained expansion of the approved list by one application after the first results were published.  Funny how that works.

The Jim Ashe we refer to is the very same one who moved on to take the place of our current Town Manager, across the bridge in that uppity little backwater with the fancy-schmancy municipal complex.

Recent news reports about the proposed downtown Brunswick multi-level parking garage (take that, Topsham!) stirred a rush of fond memories from those glory years.  You can find the report here:

   Without grant, Brunswick sees no need for downtown garage.

Turns out our application to fund construction of the garage was denied.  Looks like this is a time when local SOB’s failed to come through.  (Note to Senator Stan, the minority man: if you want to achieve lofty OUR SOB stature, you’re gonna have to do better than this!  You will be running again, right?)

But guess what!  Turns out we were only kidding, in a manner of speaking, about the need for that big city parking structure.  So no harm done, apparently.  You’d think kidding about the need for a $3.4 million capital project would be a no-no.  And you would be wrong on this, like so many other times when you think rational thoughts.

We’d like to know who the consultants were that helped us out on this application, so we can watch to see if they get any more of our tax dollars.  Hopefully not, but you know the old saying!

One of the more ‘fascinating’ passages in the report is this one:

But town staff now say that additional parking there may no longer be necessary.

Town Manager Gary Brown said based on conversations he has had with the Northern New England Passenger Rail Authority, which operates Amtrak's Downeaster, the demand for long-term passenger parking may not be as great as initially expected.

What???  Could this be the first ‘walking back’ of the rosy projections that the train would bring 35,000 visitors a year to Brunswick, or 100 a day?  Say it isn’t true; we aren’t prepared for an attack of the vapors!  Trusting citizens have long been convinced the train would bring ten times the visitor traffic of the current bus service, because, well, just because!

As a closing note, our Town Manager indicated he may bring in someone from the trusty Government Consultant Industrial Complex (GoCoInCo??) on a slightly different question:

Brown said he is considering contracting with a parking consultant to determine what the demand could be when the train service begins.

The results should be interesting, assuming it isn’t the same consultant that helped us with the grant application for the garage.  Or the ones that sold us on the back in parking spots on Station Avenue.

Last thing we need around here is a multi-story parking garage with a corkscrew ramp system that you have to drive up backwards in order to “calm” the parking lot.  Although it might fit nicely with the emerging Disneyesque zeitgeist here in town.  We might even have the exterior done in a Matterhorn motif, painted by willing members of our local creative economy.

I wonder if we’d be able to use the old E tickets we have saved up from years ago?  Hopefully the line won’t be too long.  We’re getting too old to wait for our thrills.

Tuesday, October 11, 2011

No-bid naughtiness, Municipal style

Remember during the Bush administration (“do you miss me yet?”) how we were constantly hammered with news reports of no-bid contracts being given to Haliburton, the company once headed by Dick Cheney, VP to President Bush?  It goes without saying that government procurement activities, given the absurdly huge sums involved, and the political meddling always present, provide more than enough opportunity for mischief, or far worse.  More about that in upcoming posts.

Funny, then, how no one makes an issue of no-bid contracting by local government, in this case, the Town of Brunswick, and the Brunswick School Department.  Contracting that has clearly political implications.  There’s enough here of interest that you’d think any newspaper worth its salt would have an investigative reporter digging into the subject.  Which explains why The Ostrich hasn’t so much as mentioned the subject.

Let’s take things one at a time.  You may have heard of the Maine Municipal Association, a non-profit enterprise that is, in effect, a wholly owned subsidiary of all but one or two municipal governments in Maine. The MMA is a highly visible presence in Augusta, lobbying for the interests of said governments, most often in opposition to the interests of individual taxpayers who fund them.  They dig their heels in whenever the slightest challenge to government status quo arises.  Think TABOR and other recent initiatives.

We know a little about MMA operations.  Their operating revenue derives from two sources.  The first is dues charged to member municipalities,  which amounts to roughly $1 million per year.  The second is insurance operations, in which they provide various forms of coverage to member municipalities.  Profit from this activity is in the range of $8 million a year.

You can trust us on this; our numbers are in the right range.

The $8 million in profits from insurance operations has largely been used to fund a variety of partisan political activities.  Especially campaigns to defeat or approve citizen initiatives on behalf of their municipal government members.

One might reasonably ask, therefore, whether towns are getting the best possible deals on their insurance coverage.  Especially if they are not sending it out for bids on an annual basis, commensurate with the annual budget cycle.

We’re not sure how much Brunswick pays to the MMA for insurance products, but we will follow up and report to you when we get the answer.

Now let’s move on to the other face of this phenomenon.  The Maine Education Association is the statewide teachers’ union, and they are immensely powerful in matters that drive school department budgets.  Surprise, surprise; they also operate an insurance business in addition to basic member representation services.

We are not nearly as familiar with MEA operations as we are with those of the MMA, so we won’t make any estimates of their scope.  We note, however, that the Brunswick School Department employs many more than town government, and their budget is more than 60% of overall town spending.

We presume, then, that the School Department spends more on insurance products with the MEA than the municipal side does with the MMA.  Again, you have our word that we will do our best to run these figures to ground.

The teachers’ unions, at both the state and national level, are far more engaged in partisan political advocacy than is the MMA.  We conclude that their insurance operations are more lucrative.  And we can easily imagine that purchasing insurance through the union is a non-negotiable aspect of teachers’ contract discussions.

Where are we going with this?  We’re going to a conclusion that the financial interests of taxpayers are ill-served by the insurance purchase processes of both municipal government and the school department.  And that it’s time that both put the purchase of all insurance out to bid on the open market as a matter of course.

Each of you reading this should contact your town councilor and school board member to demand that they see that this happens.  If they won’t, you have evidence that being a good steward of taxpayer resources is not a priority for them.

Old and lazy as we are, you have our personal commitment to look into a statewide effort to stimulate rigorous competition, on an annual basis, for this insurance coverage.  If the MMA and MEA win that competition, fine.  They will have structured their pricing to win.  If not, they will have been displaced by private sector providers who offer a more competitive product.

Either way, taxpayers win.  Who can argue with the motivation and the outcome?

Other than those who believe government monopolies are a good thing.   And that local insurance agencies shouldn’t have a chance to save us money.

The Impossible Dream: ‘fair-share’ based economic salvation

The whole ‘fair-share’ thing we hear so much about these days has been driving us nuts for years, largely because the word ‘fair’ is so subjective and nebulous.  It reeks of sensitivity and ‘justice’ of whatever sort you prefer, but it’s impossible to pin anyone down on just what they mean by it.

We remember years ago when a former prominent council woman here in town was decrying the ‘constant cuts in education’ and holding up other budget straw-men to lure beleaguered taxpayers into her web.

We asked her if the current taxes we pay aren’t enough, just what would be enough in her opinion.  As best we can recall, she answered she “believed in fair taxation,” and then used her bully pulpit to change the subject.  You’ll forgive us, we hope, if we tell you we do our best not to recall any more about those days than we absolutely have to.

Back to the dream du-jour.  A goodly portion of our ruling aristocracy is currently making the case, over and over, that all our budget and public debt problems could be solved if only ‘the wealthy were made to pay their fair share.’  Our own Congress-critter, one Rochelle Pingree Sussman, publicly stated “It’s time for the rich to start paying their fair share” in response to the President’s call for a new stimulus package. 

We’re counting on her to chide her hedge-fund manager multi-zillionaire husband S. Donald, who provides her with private jet transportation, into paying HIS fair share, and we can’t wait to see what fair means in their little love-nest.  Oops…..might that mean he has to move his little nest back to the states, instead of claiming residency on some remote island?  No problem; it shouldn’t take ‘an act of congress’ to make that happen.

It appears that the simple premise highlighted above is the leading rationale for the numerous “occupy xyz” encampments going on around the country as we speak.  At least for those ‘campers’ who have any clue as to why they are taking part.  Many don’t, if you watch the news.

There’s only one problem with this premise, and you might say it’s a really, really big one.  Here’s the good part; it doesn’t depend on what you think ‘fair’ means.

Numerous reports have shown that even if you take every red cent the wealthy earn in this country, it wouldn’t remotely approach the revenue needed to support government’s reckless, drunken spending habits.  Here’s one such report.

The ‘money’ quote in this column is this:

Here’s the bottom line — there just aren’t enough rich people to pay the government’s bills, even if you confiscate every dime of income from every millionaire and billionaire in the country. If we give Nancy Pelosi, Harry Reid and Barack Obama all the tax increases they are demanding, it won’t cover one tenth of the annual deficit of $1.6 trillion. We would still have to borrow well over $100 billion a month to pay for current spending.

This and similar reports are based on widely available government data, and as yet, we have seen not a single attempt to prove that this ‘bottom line’ is wrong.  In keeping with modern political practice, though, that hasn’t stopped the demagogues from riding the same one trick pony round and round the mulberry bush.

We’re pretty confident that adding the Bowdoins and Harvards and others to ‘the wealthy’ in the equation would have a negligible effect on the analysis.  Not that anyone in the aristocracy would support doing so; let’s face it, there’s a line even ‘progressive’ elites won’t cross.  Especially this one.

The article goes on to describe America’s long-standing love affair with European style ‘social-democracy,’ which most of us see as socialism of one form or another.  You should be aware of this ‘social-democracy,’ since it’s currently bringing down various European Union economies, and causing riots in the streets.  Not a good omen for affairs here in the ‘new world.’

Making reference to the proposal for a new stimulus package, labeled as a ‘jobs plan,’ and payed for by the new fairer share from the evil wealthy, the author points out that after the first stimulus bill was passed,

the private sector lost 2.5 million jobs, but the federal government added 416,000.

In other words, the first bill wreaked havoc on the private sector that creates wealth and real jobs, and fostered unsustainable growth in the public sector, which by definition does neither, while creating additional burden on a shrinking private economy.

Think about that: 416,000 new jobs in the federal government alone.  That’s probably close to the entire work force in the state of Maine, if we had to guess.

If this doesn’t scare the bejeezus out of you, nothing will, or you aren’t paying attention.  But excuse us if we try one more time to frighten you into doing so:

Vaclav Klaus, president of the Czech Republic, recently warned about the perils of following Europe’s lead, “Europeans today prefer leisure to performance, security to risk-taking, paternalism to free markets, collectivism and group entitlements to individualism. … The critical situation in Europe today is visible to everybody. It is not possible to hide it. … So maybe Europe’s crisis today will at least help you in America turn back toward freedom.”

We’ll say it one more time: no one, repeat no one, has mounted a credible proof that the underlying assertion – that the ‘wealthy can pay all of government’s bills – is correct.

Be afraid; be very afraid.  Rampant denial of reality is becoming the norm.

Wishing upon stars won’t get us out of this one.  Nor will anything short of staring the truth in the face and saluting it.

Wishing upon a star….for non-profit status

Gee, Uncle Walt, can we be a non-profit too?  ‘Cause after thinking about all the other non-profits and how nice everyone treats them, we think we’re just as deserving as they are.  And it sure would be nice to save all that money on taxes, just like they do.

We plan to call ourselves The Poppycock Public College of Disturbing and Embarrassing Societal Realities.  It has a nice ring to it, we think, and we’re hoping TinkerBell will sign on as our mascot.

Here are our qualifications for this esteemed economic status:

  • We are an educational institution, just like Bowdoin College, the widely revered bastion of intellectual superiority here in our little town.  Everything we do is intended to educate somebody, somewhere, sometime.
  • We are clearly non-profit.  We haven’t made one black cent since beginning operations, and we don’t expect we ever will.  You might say we are the poster child for non-profit cachet.
  • Our meager nest-egg wouldn’t make rounding error range for the near billion dollar cache of cash the little college is sitting on.
  • We’re lucky if we can turn a 4% annual return on our nest egg, compared to their near-fantasy level of 22% in this recession plagued economy.
  • We’ve been paying our fair share of taxes for as long as we can remember, and thanks to our town and those who don’t, our share keeps getting bigger and bigger.

That pretty much wraps it up, Uncle Walt, so we’d appreciate anything you can do to help us out on this.

If you can’t grant our wish, could you at least do something to see that the other prominent non-profit here in town has their status changed to more accurately reflect their wealth and highly profitable operations?  That would be the fair thing as far as the rest of us tax-paying schlemiels are concerned.

Besides, we hear they are dead set against tax breaks and loopholes for the wealthiest in this country, so they’re probably already at work on the necessary legal documents.  So it shouldn’t take much ‘star power’ to make our wish come true.

All the schlemiels will be very grateful when municipal property tax revenues increase by 50% or more in one swell foop.  We promise that if you ask what they’re gonna do to celebrate, they will all answer “We’re going to Disneyland!”

So this is win-win, good buddy!

Monday, October 3, 2011

McClellan Building: Fantasy Land Castle, Times Record II, or both?

As you probably know, our Town Parents (‘Fathers’ would be politically incorrect, and we can’t bring ourselves to say Town ‘Mothers’) are in discussions with Bowdoin College about acquiring the relatively new McClellan building at the corner of Union St. and Station Ave. in exchange for The Longfellow School Building and property.  Expectations are that the Bowdoin building would become the new home of our municipal offices.

Visions of sugar plum fairies and TinkerBell ignite the imagination at the promise of our very own Fantasy Land Castle working its magic on all who would visit here.  Combined with the local train station, images of a municipal Disneyland, fashioned after the original, begin to appear.  We can even see a bottomless vernal pool where fairies tend their shrimp, while Small World like boats carry unbelieving children and adults alike.  Do you think lobsters could be part of the mix?  And a submarine ride?

The possibility of acquiring the McClellan building, while attractive on its face, stirs up unhappy memories of what might politely be called Brunswick’s undistinguished facility stewardship and planning record.  While there are too many examples to list, let’s recall just a few.

  • A classic and much loved municipal building, smack in the middle of downtown on Maine Street, was demolished to make room for the now departed Grand City department store, and replaced with the civic embarrassment at 28 Federal Street.  Town officials have been trying to escape this facility for years, although considerable sums have been invested in consultants to suggest how the sow’s ear could be turned into a silk purse.
  • False starts on public safety facilities have been frequent, and lately, plans for multiple new facilities are once again on the table.  Citizen opposition to prior plans, as shown in a referendum, following which the council said ‘we got the message,’ have strangely been forgotten.
  • School buildings have not been well maintained, and are tossed aside as so much dead weight when pretty new structures paid for with ‘free money’ from the state are suggested.
  • The former Times Record building on Industry Road was purchased by the town in a perfect example of governmental incompetence in managing and executing capital facility programs.  And now it sits largely abandoned, waiting only, we suppose, for a multi-million dollar ‘remediation proposal.’  Which may well consist of just bulldozing it down, burying not only the acquired building, but also the half million or more in improvements made on behalf of a local community college.

It’s no secret that we supported the purchase of the TR building, based on the size and price, and having been in the building more than once.  Tacit in that support, in which we were not alone, was an expectation that paid town professionals would conduct due diligence before committing us to a purchase contract.

We were silly enough to consider such foresight de rigueur, as we would for any purchase of an existing home or other structure.  You hire a building inspector; how hard is that?  How much could that cost?  You don’t finalize plans to buy the building until you know and understand what they find.

Silly is right.  The town bought the building for what seemed a great price, only to find after closing that it needed renovations of more than three times the purchase price!  Our leaders were shocked, shocked we say. 

We’ll let you decide whether the shock was of the ‘crocodile’ variety, given the lust for new and elaborate Taj Mahals to foster community pride, and making sure neighboring backwaters don’t continue to embarrass us.  Be careful though; buying into the crocodile theory could lead to speculation about deeper mysteries associated with taking the old building off the owner’s hands.

Looking into things after the fact, it appears we decided that due diligence is for little people, and instead, we hired – you guessed it – consultants to examine the building.  From the report we saw, that consultant concluded that while the building had ‘some’ issues, overall it was in surprisingly good shape.

Somehow, in the months between that report and completing the purchase, the building suffered severe decline.  At least if you were to judge by the renovation estimates.  Just about every aspect of the place was deemed in dire straits and in need of replacement, but by then the town had become the ‘proud owners’ of the facility. 

And so those best laid plans for improving municipal facilities suddenly became DOA, stunning local officials and stimulating much wringing of hands.  Perplexed looks were common-place as the consequences of our undeserved misfortune sank in.

Which leads us to consider the plans of the moment.  The plans for the McClellan building, that is.  We want to believe that a lesson has been learned, and that true due diligence will precede finalization of any deal.

We want to believe that, but we can imagine a story line for doing exactly the opposite.  It goes like this:

“Bowdoin has made a good faith offer, and it would be ungracious and thoughtless of us to suggest there might possibly be any problems with the building.  We can’t risk undoing the fragile balance holding the proposal together.  And besides, the building is nearly brand new; what could possibly be wrong with it?”

As to that last point, we say poppycock!  We built our house 14 years ago, and within the first ten years, we had two significant episodes of structural damage from water incursion, both caused by minor anomalies in the installation of flashing.  The damage only became apparent when our painter began to do some exterior maintenance.  In other words, even ‘brand new’ buildings can have significant problems hiding from normal view.

The only way to avoid this kind of surprise is to make sure we bring on board an experienced municipal facility consultant to guide us in closing the deal with Bowdoin College.

Continuing with the possibility of a classic governmental SNAFU, we also are confident that upon completing the swap, if they should indeed do so, it won’t be long before we begin to hear the stories about how officials “didn’t realize how much work would have to be done to make the building suitable for town purposes.” 

We don’t imagine, for example, that the building has council chambers of appropriate character ready to be occupied.  Nor space set up for serving the public like the codes, tax collection, assessing, and town clerk offices do.  And how much do you think changing the exterior to look like a castle is going to cost, complete with night sky special effects?

There’s got to be a number of other details that simply cry out for ‘doing it right and doing it now.’  You know, “we basically got the building for nothing, so even with the spending we need to do, the town is still saving a fortune.”

Coming up with the right customization plan is going to take an experienced consultant familiar with facility acquisition and the complex needs of municipal staff.  Fortunately, a local firm, Eaton Peabody, has the expertise and personnel to handle this challenging assignment. 

In case you weren’t aware, Don Gerrish, our former Town Manager, is now on Eaton Peabody’s staff.  He just might be the right fit for the job, and the effort shouldn’t cost more than a few hundred large.

Why?  Because he was the man in charge for the acquisition of the old Times Record building, the one that may soon be tossed on the ash heap of Brunswick town facilities.

So we shouldn’t have to worry about making the same mistakes that look like they will lead to sending millions down the rat hole.  Don surely learned from the surprises encountered on that undertaking.

We’re confident that if you call Eaton Peabody to ask, they’ll probably say “and you can trust us on this, because we’re not like all the others.”  If that’s not enough to make you happy, then we don’t know what could. 

Except having your own star to wish upon.

Sunday, October 2, 2011

Bits and pieces….the weekend version

Sand gets in your eyes

As long as we’re in the frame of mind to discuss things getting in your eyes and obscuring your vision, we might as well dip into the rich mine of Ostrich imagery.

That moniker, as you well know, derives from the view that our ‘award winning’ local print media outlet frequently sticks its editorial head in the sand.  Consequently, they often end up with sand in their eyes, which makes it ever so difficult for them to see clearly.  Especially if they make things worse by rubbing their eyes.

We hope this explains a clearly misguided ‘view’ in their pages in recent weeks, because if it doesn’t, things are much worse on Industry Road than we thought.

Just about a month ago, they editorialized on safety in the vicinity of the new Harriet Beecher Stowe School.

“The beautiful new building represents a sound investment in this community’s future and an integral component of state, regional and local Brunswick Naval Air Station closure comeback strategies.”

We won’t touch upon the ‘comeback strategies’ concept now; that in itself is worthy of full staff attention beyond what we can offer at the moment.  Instead, since we drive by said school on a nearly daily basis, we fixated on the ‘beautiful new building’ phraseology.

We ask you: do you know anybody who has driven by the new school, and told you how “beautiful” it is? If you do, you have what we politely call an ‘unusual’ circle of acquaintances. or friends, if that be the case.

In case you do, The Ostrich would love to get their names and addresses, because they seem like perfect candidates to sign up for a prepaid subscription.

You might even negotiate a finder’s fee.  Which you could use to buy eyewash for your friends.

All politics is local, and so are double standards

Years ago, and we don’t remember where, we came across a commentary about congressional corruption.  It included a passage that read something to the effect that “all politicians are crooked sons-a-bitches, but Congressman Porkbelly is OUR son-of-a-bitch.”

It made the point quite clearly that most people think the problem is with everyone else’s congress-critters, while our very own such critter is different, because he/she focuses their corruption on our local best interests.

This is the very essence of pork-barrel politics, and is, if you think about it, the heart of the money-driven, special interest, big-government corruption and pandering that is about to bring the American experiment to an ignominious down-fall.

Here at Side, we have always been naive enough to believe we elect US Senators and Representatives to represent us in matters of national interest, such as defense, protection of our inalienable rights, and preservation of our Constitutionally based principles, especially the notion of limited government.  As opposed to doing their best to raid the local treasury to serve local interests, thereby ensuring that they maintain their protected status as OUR sons-a-bitches.

This places us squarely in a very small and dying minority.  Our membership there is clearly demonstrated by the news and dynamics associated with redevelopment of the Brunswick Naval Air Station.

How often have you read about the evils of ‘tax loopholes,’ ‘subsidies,’ and ‘corporate welfare’ in the pages of The Ostrich and other more prominent news outlets, or heard about them from pundits on the broader national stage?  Here in Brunswick, we’re blessed with more than our fair share of folks convinced that profit based enterprises in the private sector, particularly heartless corporations, are the very soul of inhumanity and social injustice. 

Even if millions and millions have built retirement nest-eggs by sharing in their success.  Including, we are sure, a goodly percentage of those whose wagon-wheels are the squeakiest.

Which makes recent reports all the more revealing of local duplicity.  Such duplicity, we would think, renders the oft-professed sanctimony null and void, unless you have a taste for hypocrisy in its most artful and local forms.

A bit of independent study will quickly reveal there are all sorts of tax incentives (‘loopholes’), subsidies (‘investments’), and grants (‘corporate welfare’) associated with base redevelopment.  These are ‘targeted’ towards those who shop around for the best deal they can get from taxpayers.  While Oxford Aviation seems to have faded from the local radar screen, they were the poster child for such shopping, including the use of F. Lee Bailey and John Richardson as sales agents for their efforts.

We refer here to recent reports of $1.7 million in federal funds approved to support redevelopment activity at what is now known as Brunswick Landing, but will always be the former base to us.  That sum includes $700,000 to directly benefit Kestrel Aircraft.

Even better, this ‘investment’ will ‘leverage’ equal funding from Maine taxpayers borrowed via bond issues.

But it’s ok, because all the sons-a-bitches associated with this economic ‘stimulus’ are OUR sons-a-bitches.  It’s those bastards in all the other states that are causing our problems.

We just can’t understand why the uninformed dolts in those other states don’t wake up and do something about it, so the rest of us don’t have to bear the burden of their irresponsible and self-centered local agendas.

In the midst of the “Great Recession,” local non-profit has a good year

You know what a ‘non-profit’ is, right?  We’re loaded with them here in Maine.  They qualify for special status that makes them exempt from just about every form of taxation that afflicts for-profit enterprises and the rest of us who pay the freight charges.

They include everything from hospitals to public advocacy groups to charities to Churches to government enterprises.  There’s even special non-taxable status that applies to the redevelopment of the former Naval Air Station.  The details are complicated, but suffice it to say whatever success is achieved there will do virtually nothing to mitigate local and state tax burdens.

‘Non-profit’ status also applies to educational institutions like Bowdoin College.  Words have meanings, the old saying goes, but that notion is a bit hard to swallow in light of recent reports.

We read in the local media that “Bowdoin College’s endowment is larger than ever before: just over $900 million.”

Turns out the endowment grew by more than 22% in the recent fiscal year.  Not bad; how did you do in your IRA’s and 401k’s?  We suspect Bowdoin has the inside advice of some real financial movers and shakers, given the successful hedge fund managers and other elites amongst its alumni base.  Still, these numbers are stunning.

The fund made $164 million on its investments during this period.  While the same article reports that Bowdoin’s investments had a losing year in the recent past, we recall not long ago reading that their endowment was less than $500 million.  So by any measure, they have done well. 

Very well, thank you, including growth attributable to new contributions.  On the flip side, of course, are debits caused by dipping into the fund to finance operations and other vital expenditures, like replacing one ice arena with another ice arena.  And embellishing their art museum with a $25 million renovation, which clearly improves the quality of instruction they provide to their art-deprived student body.

Either way, whether through the generosity of their donors, or their own investment strategy, Bowdoin has achieved results well beyond that of America’s best-known profiteering corporations.  We’re confident that gains made by Bowdoin avoided the taint of free-market participation; that would be so totally counter to the global justice and socially responsible principles they espouse.

It’s fun to give some scale to these numbers.  Bowdoin has about 1700 students as far as we know.  So their endowment fund has a value of about $530,000 per student.  Not bad; if they earned only 5% a year on these funds, well below their historic average, it would amount to roughly $27,000 per student.

We’re delighted that Bowdoin has been able to do so well in their investments, even though we’ve had starkly different results on our own.  Petty jealousy is undignified, so we won’t belabor that point.

And we know well that questioning or challenging the college’s role as local taxpayer is heresy of the worst sort.  Their moral superiority, as expressed in numerous ‘study concentrations’ of cultural enlightenment, more than compensates for any lack of financial load sharing with the local beneficiaries of their presence.

So what we are about to say should be considered off the record; the views of an inconsiderate, uninformed, and insensitive local gadfly.  With such a freeing confession, here we go.

  • Any enterprise that makes 22% plus on its investment assets in a single year should be ashamed to claim ‘non-profit’ status, if not prohibited from doing so.  Especially when those assets are in the range of several times their annual operating expenses.
  • Any such enterprise whose fair market appraised value would likely increase the total valuation of their home-town by 50% or more is not living up to their tacit obligation to share in the costs of the services from which they benefit.
  • Any such enterprise that is prone to poor-mouth its ability to participate financially in specific economic activities with their home town discredits and undermines their self-professed ‘responsible citizen’ status.

“Fair Share” anyone?  We can’t help but wonder what the aggregate income and net worth of all living Bowdoin alumni who meet the current administration’s guidelines for ‘wealthy’ would be.  And what their ‘fair share’ tax burden would amout to.  Has anyone heard George Mitchell step before a microphone and ask to be taxed more lately?

Charities and Churches are one thing.  Elite colleges awash in wealthy alumni, stunningly valuable real-estate and facilities, and huge stores of rapidly growing financial assets disgrace the very concept of non-profit status.

And even more, dishonor it.  And those that do are sons-a-bitches, and we shouldn’t put up with it. 

Lucky for us, Bowdoin College is OUR son of a bitch. So we shouldn’t really get our tassels in a knot.


Geez, I’m one long-winded SOB.  But at least I realize it.  When I started this post, I had intended it to be short and sweet, but it seems I’m incapable of such brevity.  The more I write, the more thoughts emerge, so the more I write, and well, you get the drift.

No wonder town councilors cringe when I show up at a meeting, and have a group case of the vapors if I approach the public podium with papers in hand.

Oh well; somebody’s got to hold the local blowhard extraordinaire office.  That is what they called me, wasn’t it?

Saturday, October 1, 2011

Green Gets In Your Eyes: Applied Ethanolomics and Passenger Rail


As Yogi Berra might have said, “the future of passenger rail ain’t what it use to be.”

Remember the old ballad “Smoke Gets In Your Eyes,” by Clyde McPhatter and the Platters?  If you do, and you danced teenage foxtrots to it like I did, you pretty much just gave up your age.  I remember it well; the tune for sure, and most of the words, actually.  I guess those first ‘coming of age’ close dances left quite am impression on me.

I’m thinking about writing a modern day version called “Green Gets In Your Eyes,”  It’ll wax melodic about having your heart swept away by dreamy environmental nirvana, and how it clouds your ability to see the reality right in front of you.  It probably won’t be too ‘danceable,’ as they used to say on American Bandstand, but I hope to give it a certain je ne sais quoi just the same.

By now you should be wondering what the hell I’m talking about, and why I don’t just get right to it.  I could, but that wouldn’t be as much fun as amusing myself with scatter-brained analogies and other flights of fancy narrative.

Alright, then, since you insist, let’s get on with it.  In my long and undistinguished career in the defense industry. I often heard it said that

“the Government wants to save money, and they’ll spend whatever it takes to do it.”

And it was quite often proven true, discouraging as that could be.  I also had at least one major situation where we proposed a major system evolution that would have saved millions and millions, with almost no risk and no front-end investment, but the government was so distrustful of such proposals by industry that they wouldn’t let it get to first base.

A more contemporary version of the ‘save money’ quote above might go something like this:

“The government wants to go green and stop global climate change, and they don’t care how much environmental and economic damage it takes to make it happen.”

While there are doubtless hundreds of cases to prove the point, two immediately come to mind.  The first is the Solyndra debacle, which has been all over the news recently, and is leading to discovery of many more examples of government ‘good intentions,’ or far worse, providing cover for bumbling, stumbling, and crony capitalism.  Who knows; it might even lead to a bit more scrubbing of the fact sheets on the budding windmill business here in Maine.  We just need to find our very own Don Quixote and his loyal squire, Sancho Panza.

The second is the whole ethanol goat-rope, or if you prefer, fiasco.  What a brilliant example of the worst government is capable of when it decides to substitute its own perverted motivations and misguided logic for the self-regulation of free market forces.  Made possible, of course, by unlimited access to opium (OPM-other people’s money), and when that runs out, printing and borrowing even more.

Let’s review some of the highlights of the great ethanol experiment, which at this point, is probably irreversible:

  • It reduces vehicle mileage typically by 10% or more; gee, thanks for the help, Senator Foghorn.
  • It props up farmers who couldn’t make it on their own.  Just like all the other farm subsidies.
  • It diverts land away from other desirable crops and uses to grow corn.
  • It drives up the cost of a huge array of food products, including meats.
  • It causes mechanical problems in marine engines and small engines, like mowers, generators, etc.  I’ve had these problems myself; nothing like having your generator quit an hour after the power goes out.
  • It costs more in fossil fuel based carbon footprint to manufacture and distribute than it saves by adding to gasoline.  In other words, it increases greenhouse gases, rather than decreasing them.
  • It perpetuates destructive ‘you scratch my back and I’ll scratch yours’ based politics.
  • It brings more big money distortion to our political system.
  • And these are just the obvious ‘benefits.’

Which reminds me of the old line about “Bob can seem a little off-putting when you first meet him, but once you get to know him, you’ll really dislike him.”

It’s like the geniuses who think buying an all electric car will completely eliminate their carbon footprint, and certify them for local hero status.  You know, that gives me an idea.  Given all the homes heated with fuel oil around here, there should be a fortune to be made selling fully-electric replacements for oil fired boilers.  Just think of all the personal CO2 pollution that would eliminate!  (Hey Stella!  See if you can get in touch with Angus King, and tell him I’ve got an idea that should ‘blow’ him away.)

Which, in a very roundabout way, brings us to the punch line about government investment to bring back passenger rail as a means to reduce the carbon footprint of vehicular traffic on our highways and byways.  We talked briefly yesterday about the relative carbon profiles of trains and buses here.

Side submits that the rationale that drives the near-religious fervor for passenger rail is a direct spin-off of the collective brilliance and wisdom reflected in the ethanol mandates and the absurd consequences they spawn.  Politically, economically, and environmentally.

On second thought, maybe I should stop complaining, and head down to the local Kool-Aid emporium for a pint or two.  Because the good news is that if the train doesn’t work out financially, the usual suspects will claim it’s because it was under-funded and the public wasn’t sufficiently educated.

Hence, it can all be fixed by spending even more; so new truckloads (or trainloads!) of free money should be coming our way.  Opportunities for revered consultants should abound! 

Matter of fact, if you’re a devotee of modern government economic planning theory, you should be hoping and praying it does fail, so we can get those borrowed dollars up here as fast as possible.  Then things can really takeoff on the right side of the tracks.  (You don’t know how hard it was for me not to type ‘left side of the tracks.’)

One more curiosity for you to ponder.  In the current fiscal year, Brunswick will spend about $600,000 resurfacing roughly 3 miles of roadway.  Without counting, let’s assume the Portland to Brunswick Amtrak extension passes through 7 towns.  The track upgrade investment for the service is $35 million.

How much good could that money have done for the affected towns?  Well, divided evenly that would equate to Brunswick spending $5 million on road resurfacing, or enough for 24 miles at the current rate, or the equivalent of 8 years worth at the ‘normal’ pace.

I’ll leave it to you to decide which use of the money would make a greater and more widely used improvement in our transportation infrastructure, remembering that we already have established bus service running between here and Portland.

As for us, it should be pretty clear that we’re on the Other Side of the prevailing local wisdom and socio-political consensus.

But hey, somebody’s gotta live on the wrong side of the right of way, figuratively speaking.  And after all these years, we’ve come to appreciate the solitude, even if all the partying takes place on the other side.