Sequim

I have a soft spot for the Olympic Peninsula, a truly beautiful corner of Pacific Northwest.  Years ago, a recruiter contacted me about the city manager position in Sequim (pronounced "skwim").  I have not kept close track of the small coastal city, but my spouse recently noticed something on her news feed.  That led me to this op-ed piece.

There's a good bit to unpack here.  The departing city manager, Charlie Bush, reportedly has (or had) an employment agreement with the City.  If he is terminated for anything other than cause, he apparently receives six months pay as severance.  If he resigns voluntarily, he gets nothing.  What is this nonsense about "negotiating a resignation"?

The City of Sequim is legally obligated to pay Bush under the terms of the contract.  Bush has no incentive to negotiate away money to which he is presumably entitled.  The City may have some interest in a separation agreement with some nondisclosure language, i.e., both sides agree to say nothing bad about the other.  The separation agreement itself is a public document so there's a limit to how much can be swept under the rug.

A city manager (or county administrator) serves at the pleasure of the governing body, normally a City Council or Board of Commissioners.  Given the uncertainty of local elections, most local governments Chief Administrative Officers (or CAOs) wisely insist on a written employment agreement.  The idea behind severance is the very real prospect that a CAO who has been doing a good job can be dismissed for absolutely no reason.  If one believes the local news coverage (and outpouring of support from Sequim residents), that seems to be the case for Mr. Bush.

One of the problems with severance is that a governing body can balk at paying the negotiated sum.  A colleague of mine had a contract guaranteeing nine months' severance.  His Mayor and Council only paid five.  Most CAOs need to move onto another job and cannot afford the time and cost of a legal fight.  My proposal: Add a provision that any portion of severance wrongly withheld is subject to triple damages and the local government paying all legal fees.  That provision creates an incentive for the jurisdiction to honor the contract bargained in good faith.

At the risk of sounding like a curmudgeon, I think local government has changed over the past 25 years and not for the better.  The harsh partisan acrimony at the state and federal level has leached into the groundwater of local government.  The toxicity and omnipresence of social media has made running for local office far less appealing.  The job of the local government CAO has become harder and more tenuous.  It is in the interest of good governance for municipal and county administrators to have solid employment agreements.

2020

Near the end of 2019, my wife and I ended our 18-month sabbatical.  I accepted appointment as a city manager thinking 2020 would be an exciting year.

I did not expect what easily qualifies as an annus horribilis.

Of course, that characterization is relative.  Even with the COVID-19 pandemic and the economic malaise, life in the United States is considerably more comfortable than many places in the world.  Unlike many Americans, I have been gainfully employed throughout the entire year.  There have been modest inconveniences, but doing considerably more cooking at home hasn't been a hardship.  The situation has been conducive to more home projects, handy given that we've settled into a new house.

Aside from a new position, another change for me--as a public administrator--was my decision to allow my membership in ICMA to lapse.  I have been a card-carrying members of the International City/County Management Association since the late 90s.  In the midst of a financial crisis that has forced our city to layoff public employees, spending over $1,000 on a single professional membership did not seem appropriate.  That's particularly true when compared to an outstanding organization like the Government Finance Officers Association (GFOA).  We could have six employees enrolled in GFOA for less than my annual dues.

Part of the situation with ICMA is the third party payer problem, something endemic in health insurance.  When a employer pays for an employees health insurance, the employee has no real incentive to shop around based on price.  The employee also rarely sees the true price of the good or service.  Most ICMA dues are paid directly by employers.  It's fairly standard to include the obligation to pay dues in a manager's employment agreement.  Given that it's largely customary, a city or county simply signs the agreement.  Someone in finance sends a check to ICMA every year and rarely does anyone sit down and do a cost-benefit analysis.

In broad terms, I think ICMA is a good organization.  It's also inarguably an expensive one for members (or more accurately, members' employers).  ICMA has its headquarters in Washington, DC, a city that is the antithesis of local government.  It's also generally an expensive labor and housing market.  A colleague of mine once described ICMA as a "high-priced consultancy."  That likely a fair description.  Some local governments can afford high-priced consultants.  Many--including ours--cannot.  There are other reasons I think ICMA has lost some of its value-added over the past 20 years, but that's for another post.

The Contrarian Administrator's Tips for European Travel

I have done a fair bit of traveling, but only recently reached Europe.  The extent of my preparation consisted of watching some Rick Steves’ videos and packing clothes I thought would work for climates from Panama to winter in Germany (and accidentally, Iceland).  Here are some thoughts in no particular order.

1.  Pack light.  I think Rick Steves is right about packing light.  I fit everything for a six weeks (and wildly different climates) into a carry-on bag, the kind with wheels.  I am of an age (and size) where a backpack looks silly.  Yes, Europe has cobblestone streets and walkways, but the wheels of my Eagle Creek Tarmac held up well.

2.  Dressy over casual.  Yes, I packed walking shorts.  Panama is too close to the equator—even in dry season—to wear long pants.  In retrospect, however, I should have packed a travel blazer, a pair of pants not “cargo” in design, and a couple of dressier shirts.  No matter what I wear, I’ll inevitably look like a tourist but more upscale clothes in muted colors would blend a bit better.

3.  Expect laundry.  Living out of a small carry-on means doing laundry.  This is inconvenient, but I prefer it to hauling a large bag.  The European laundromats we used were slightly larger than a walk-in closet.  Slightly.  And some run on a central computer (rather than the ubiquitous American coin-operated models).  Sure, some hotels have laundry service... if you want to pay as much to have the garment washed as it did to buy.  Personally, I think laundromats are interesting places, a small window on a culture.

4.  Expect small.  We expected things to be more compact on the Continent.  I wasn’t prepared for how much smaller.  Narrower streets.  Tiny cars.  Compact elevators (or slender stairs).  Small hotel rooms with smaller bathrooms.  I could write an essay on the mysteries of European plumbing, but I digress.  Prepare for less elbow room, personal space, and space in general.

5.  Speak some of the native tongue.  Travel is much easier if you have some proficiency in the native language(s).  It’s not just interacting with locals.  It’s reading maps, bus signs, train schedules, hotel information, etc.  Travel is simply easier if one can communicate, particularly since some of the people you meet won't speak English.

6.  Travel by train (with caveats).  We bought Eurail passes because we wanted an open, flexible itinerary.  Our particular passes (30-day continuous) were not cheap but we’ve used them extensively.  Largely by chance, we found a deal “Get first class for the price of second class.”  With all due respect to Rick Steves’, first class is worth it.  Totally.  There’s more space, more amenities, and it is quieter.

Now for the caveats.  Do more research than we did (almost none).  Know that many trains require reservations.  And the process for getting reservations can be tricky.  Every national rail operator seems to have its own system (and app).  With Portugal, Spain, France, Switzerland, Austria, and Germany under our belt, I give the nod to Germany’s app.  The Eurail app has a handy trip planner but sometimes it calculates the long way around rather than using metro connections.  Travel within a country is easier.  Crossing borders can take more planning.

7.  Don’t count on connectivity.  Hotel Wi-Fi can be hit or miss, even in high-end properties.  We probably should have bought a “burner phone” set up for Europe, but we decided to try our TMobile iPhones with the promise of unlimited talk and text in over 200 countries.  Fine print, TMobile gives you 2G coverage.  Since the tech world is abuzz about 5G, you can imagine how modern web pages load with 2G bandwidth.  We have managed (and thank goodness for the Wi-Fi provided by the high speed trains), but forewarned is forearmed.

8.  Bring a long charging cord.  Presumably, you already know about adaptors.  And that the Swiss outlet is just different enough from the balance of Europe to require its own adaptor.  Thankfully, many of the trains have outlets for charging enroute.  The location of outlets in hotel rooms, however, can be interesting.  Get a long cord.  You won't notice the slight addition in weight, but you will appreciate the convenience.

9.  Download movies or TV shows in the U.S.  I'm not cosmopolitan enough to understand why downloading a U.S. movie with a U.S. Netflix or Amazon Prime account isn't possible in the EU.  Had I known, I would have downloaded enough entertainment to sustain me through the occasional evening or train ride.

10.  Beware foreign ATM fees.  Ouch.  I used my local bank--that shall remain nameless to make cash withdrawals.  The fees were ridiculous.  I should have used my Charles Schwab debit card which doesn't charge insanely high fees.    

Our time in Europe was enlightening, educational, and occasionally exhausting.  Perhaps the most valuable is that traveling is a skill that gets better with practice.

Everything wrong with Internet journalism

From time to time, odd stories pop into my newsfeed, like a recent op-ed by Laura McGann.  McGann references a minor Internet squabble between an sportswriter of sorts, Samer Kalaf, and a NYT columnist of sorts, Bret Stephens.

If one is curious, it is easy enough to find the exchange of emails, but here is a summary.  Kalaf zips off a few impolite and mildly profane emails to Stephens.  Stephens (mistakenly, in my opinion) responds by asking who Kalaf is.  There’s tart response from Kalaf followed by a lengthy, apparently well-intended if mildly patronizing email from Stephens.  From this, McGann divines that Stephens has shown why women fail to report sexual harassment/abuse, i.e., “because retaliation.”

Welcome to the world of Internet journalism/clickbaiting where everyone is talking but no one is listening.

If Stephens want to take some of his day to engage with an Internet provoca-troll, OK.  But a newspaper writer smart enough to win the Pulitzer should be smart enough to now that the author of an email with the subject line, “You are remarkably dumb” is probably not looking for mentoring or career advice.

No matter how gifted one is as a writer, it’s tough to tell someone 20 or 30 years younger that they are acting like an ass without sounding condescending.  And it’s definitely not a good idea to reference their degree or current job... as if they had a more prestigious degree or better job or a Pulitzer Price their opinion would carry more weight.

There are Powerball odds that Stephens will ever read this, but here’s a thought.  For men over 40, giving advice is like wearing jeans.  Only a small fraction of the men who think they can pull it off really can.  And when it doesn’t work, it can be ugly.  What is sad about this is not that it’s the one trillionth example of why one should not “feed the trolls.”  It’s that the exchange was twisted into a foregone conclusion by McGann.

I am deeply sympathetic to the plight of a persons seemingly trapped in a bad situation.  I understand and empathize with people who don’t feel they can complain or stand up for themselves without losing a job, a home, or even children.  The point Stephens was making is that acting like a jerk can come back and bite one squarely in the backside.  He even made the point (and I take him at his word) is that if he were assigned to judge Kalaf’s work, he would recuse himself.

Stephens is right.  Acting badly can have consequences, occasionally surprising and unforeseen.  Frankly tthose infrequent moments of karma give me faith in the universe.  And they are infrequent.  Some absolute jerks seem to make it through life with nary a scratch.  But we invoke the utilitarian approach, i.e., the day may come where the person you kicked has a chance to kick you... mostly with kids who haven’t figured out how infrequent karma can be.

Back to McGann, the only way you can get from Stephens to #metoo retaliation is to approach the subject entirely immersed in a perspective.  I’m surprised she didn’t find a way to use the recent clickbait video of the large spider dragging a baby opossum into the narrative.

Stephens advice wasn’t the Pentagon Papers of retaliation.  It was an observation about natural consequences.  The problem of the powerful retaliating against the powerless, and the complex issue of sexual harassment, deserve better thought, and better writing.  Great journalism can consider complex issues with objectivity, sensitivity, and nuance.  Pulitzer Prize winning or not, we could use more of that.

My sabbatical: An update

I had hoped to do more professional writing during our sabbatical.  Instead, I have done far more personal writing, catching up with old friends, etc.  From time to time I have read things that warrant a blog post but the constant distractions (and logistics) of travel have not been conducive to writing.  I  also wanted our six months (more or less) to create the time and space to think about my profession and work within a larger context.  In the middle of Europe (living out of a rather small suitcase), my thoughts are turning to the more pressing question... what now?

ICMA Annual Credentialing Report

The primary professional association for city and county managers is ICMA, the International City/County Managers' Association.  ICMA offers a credentialing program for established public managers.  In 2018, there were 1,348 ICMA credentialed managers in the U.S.  By comparison, there are about 1,696 professional football players in the NFL suiting up to play every regular season Sunday.

To become a credentialed manager requires a combination of education, experience, and a commitment to ongoing professional education.  One of the requirements is an annual report where the manager describes his or her continuing education.

I've been a ICMA credentialed manager since 2006. This year, I am taking the unusual step of posting my annual report on this blog.  Public administrators (and advocates of good government) emphasize the importance of transparency.  Normally, this applies to the work of government rather than its workers but I think there's some benefit in sharing professional development goals and insights.

At the beginning of the year, I listed three professional development growth areas:

* Advocacy and Interpersonal Communication
* Policy Facilitation
* Critical evaluation of the role of public administration

The first two are common areas included on ICMA's list of suggestions;  the third is my own (not terribly surprising--I suspect--given the name of this blog).  To explain why these goals evolved during the year requires a bit of background on the city/county manager profession.

The chief administrator of a local government is normally appointed by the governing body, be it a city council, board of county commissioners, or other similar entity.  Most "serve at the pleasure" of the body; some CAOs have employment contracts offering additional assurances and provisions.  ICMA has a model employment agreement.  The most current version is available only to ICMA members but for the curious, the basic document can be found here.

For most of my professional career, I have had an employment agreement.  I entered 2018 as the final year of a four-year contract.  In football parlance, it was a "contract year."  And much like in professional football, there normally are contract negotiations.  Some deals are struck with little fanfare; other negotiations drag on for months.  Sometimes, a mutually agreeable deal can be reached, and sometimes not.

As with any business, both parties are well served by keeping contract negotiations confidential.  If a deal cannot be reached, the best path forward is for both sides to thank the other and wish them well.  That's exactly what I will do here.  My contract ended in September.  I left with nothing but positive feelings about my experience in Caroline and deeply grateful for the privilege of having spent seven years leading an evolving organization and accomplishing many goals, a few some thought were impossible for Maryland's second poorest county.

Much of my time between March and September was spent engaged in transition planning (in addition to managing the day-to-day operations of a local government with a nearly $50 million annual budget.  Myt lame duck status complicated my professional development plans.  For example, I didn't feel it was appropriate to attend the summer Maryland Association of Counties (MACo) conference at the jurisdiction's expense with only a few weeks of employment remaining.  I also missed the  Maryland administrator's conference in October and the winter MACo conference.

On the positive side, I was able to attend my first national ICMA conference in many years.  The annual conference was held in September.  Because I am a "manager-in-transition," the fee was waived.  While it had been several years since we lived on Maryland's western shore, it was easy enough to find accommodations and reacquaint myself with Baltimore's public transit system.  My conference attendance and my participation in sessions I wasn't able to attend (via the virtual conference videos) allowed me to put a major dent in the required hours of professional development.  The balance, I achieved through reading and webinars.

Not surprisingly, my professional development goals evolved with my circumstances.  The first goal of "advocacy and interpersonal communication" remained the same but the focus shifted towards communication with the governing body.  I also broadened the scope to include recruiting and retention communication.  Regarding the former, I explored how how one can better convey unwelcome but necessary information on complex administrative and policy matters without that communication becoming adversarial.  Regarding the latter, filling vacant positions had become a critical challenge for the organization during the two years prior to my departure.  Given my status as looking for a new position, I also had a personal interest in better understanding recruiting.

One book I selected to read was "Talk like TED" by Carmine Gallo.  My wife and I are fans of TED talks.  After buying the Apple TV "puck" we discovered the TED channel.  As part of reading the book, I revisited some of my favorite TED talks (like Sean Achor's TED talk on happiness).

Gallo's book does an excellent job dissecting what make TED talks work.  The book divides the TED approach into three broad characteristics: emotional, novel, and memorable.  The theme that resonated most with me was the emphasis on storytelling.  In the public policy arena where discussions are normally dominated by budget numbers, data, etc., it is important to weave information into compelling stories.  I also found a measure of inspiration in the 18-minute rule.

TED talks are limited to 18 minutes, no exceptions.  If only the same were true for budget presentations.  The 18-minute rule forces presenters to be disciplined and focused.  Scientifically, it helps listeners avoid cognitive backlog, the "drinking from a firehose" problem where listeners simply receive more information than they can process.

In Caroline, I developed a budget process called "the Caroline Way," a shameless theft of Baltimore's "the Oriole Way."  The overarching goal was to have the process become more collaborative and less competitive.  For example, we used techniques like having department heads do the budget pitch for another department or games like using poker chips to "vote" for capital projects, not allowing DHs to vote on their own proposals.  With allied agency heads buying in to the process, the budget process became far less adversarial.  Where we came up short was simplifying information for elected official and the public.  What I missed was creating a role that budget presentations should follow a TED template, i.e., 18 minutes, very few visual elements, more emotion, and more storytelling.

One of the real positives of Gallo's book (and binge-watching TED talks) was a reminder of how much of local government is storytelling.  This holds true for the recruiting process where the organization has an opportunity to tell its story, not simply ask candidates for theirs.

Another book I chose for advocacy and interpersonal communication waas "Recruit Rockstars," by Jeff Hyman.  As I left Caroline County, our senior management team was discussing recruiting.  The local economy was strong.  Unemployment was low.  County government does not pay particularly well and the traditional benefits (pension plan and excellent health insurance) seemed less appealing to the current generation entering the workforce.  We saw recruiting and retention as critical challenges.  My translation was, "How do we advocate for our organizations with jobseekers and communicate effectively in terms of recruiting?"

After reading "Rockstars," I had decidedly mixed feelings about the content.  Beginning with the negative, I disagree with the premise that outstanding employees are born, not made.  What Hyman writes is, "Sadly, C-Players never become B-Players and B-Players rarely become A-Players."  I believe people have the capacity to grow, change, evolve, and adapt.

When it comes to hiring, I urge department heads to think about intangibles: Integrity, interest, and intensity.  If an applicant comes through the door and demonstrates personal integrity, a keen interest in the work, and a high level of energy and passion... we can find something useful for them to do.  Using Hyman's language, we look for people we think can become "A" or "B" players over time--in a particular role, and with ample training, mentoring, and coaching.

I think Hyman's book is a good primer on understanding what an organization wants in potential employees and how to communicate that message clearly.  I also agree with his observation that having great employees is a key advantage in recruiting.  Great people want to work with other great people.  His book also is an example of why things that may work in the private sector may not work in the public.

On the goal of policy facilitation, I picked a hot-button topic upon which I thought more reading was due: public safety.  I chose a couple of books I thought would be interesting, "Rise of the Warrior Cop" by Radley Balko and "The End of Policing" by Alex Vitale.  Naturally, I did a good bit of casual reading from Black Lives Matter to Blue Lives Matter to Ta-Nahisi Coates rumination on Blue Lives Matter.

This particular subject was prompted by a discussion regarding School Resource Officers (SROs) in elementary schools.  Discussion is likely the wrong word.  The need for armed police officers in every elementary school was a foregone conclusion of some participants.  The depth of the debate was simply "What if something happens?"  Nevermind that "...the statistical likelihood of any given public school student being killed by a gun, in school, on any given day since 1999 was roughly 1 in 614,000,000. And since the 1990s, shootings at schools have been getting less common."  (Ropeik, 2018)  By comparison, the odds of winning Powerball is about 1 in 292 million.

There was an attempt to discuss options that might enhance school security and better fit in the elementary school milieu.  The idea of a professional with some security training but with far more focus on behavioral health had traction with school officials, but this met the "this is a job only a certified law enforcement officer can do."  This contention was not one of fact, but of faith.

This background led to the "Do Facts Matter Anymore in Public Policy?"  The short answer is, "Apparently, not."  The article by Jeff Nesbitt is good opening to the debate between "...two competing theories – 'deficit model' and 'cultural cognition.'"

Nesbitt's writes, "Journalists, by and large, believe that a well-informed, fact-based society will make sound democratic choices. That's the guts of the deficit model – that if the public only had better, factual information at their disposal, they'd make the right choices."  Coincidentally, public administrator hold the same belief.  That's why ICMA and the profession focuses so strongly on public engagement and education.

As Nesbitt's observes, there's a growing body of science supporting the notion that facts matter less than preconceived notions.  A conversational description of the phenomena can be found on NPR.  Broadly speaking, humans tend to do a decent job evaluating facts and making decisions in areas where they don't hold strong beliefs.  On the other hand, even people who confident in their objectivity show evidence of bias when asked to do an object task (like math) on a subject about which they feeling strongly (gun control).  A more wordy explanation can be found in this essay in the New Yorker.

What I enjoyed about the New Yorker essay is the notion that our species stubborn resistance to facts is based on adaptive behavior.  Put plainly:

"This lopsidedness, according to Mercier and Sperber, reflects the task that reason evolved to perform, which is to prevent us from getting screwed by the other members of our group. Living in small bands of hunter-gatherers, our ancestors were primarily concerned with their social standing, and with making sure that they weren’t the ones risking their lives on the hunt while others loafed around in the cave. There was little advantage in reasoning clearly, while much was to be gained from winning arguments."

So, do we simply give up on facts and make emotional appeals?  No.  One of the fundamental responsibilities of a city manager or county administrator is to be the honest broker of facts.  To facilitate the public policy process, however, one cannot put much faith in facts to carry the day, particularly on a question where participants have strongly held preconceived notions.

There are a few hopeful signs.  Diverse groups tend to do better than individuals (or like-minded groups) in reasoning.  The conversation about SROs might have been more nuanced had the group included parents and teachers rather than just law enforcement officers and elected officials.  Change in firmly held beliefs that fly in the face of facts can change--but generally on a person-to-person basis, incrementally, and over the course of time.  This suggests a different role for the CAO than simply a bringer-of-facts to the public policy process.  What exactly that is... I'll have a chance to figure out in my next job.

My third goal is: Critical evaluation of the role of public administration.  This evolved into a catch-all and where I'll fit in my attendance at the national ICMA conference in Baltimore.

Part of the larger question about the role of public administration requires dialogue within the profession.  This is one the great values of a professional conference, the sharing of stories, collegial disagreements, shared venting, and general dialogue about our jobs, our careers, and our profession.

My focus during the ICMA conference was not purely professional development, at least not in the narrow sense.  I attended a lunch for managers-in-transition where ICMA Executive Director, Marc Ott, graciously participated and shared his story about being in transition.  I also attended the session on the Harvard Senior Executives in State and Local Government program. 

I have had some quibbles with credentialing report reviewers in the past over what exactly constitutes "professional development."  Part of the knowledge and skills necessary to serve effectively as a public manager--particularly one who serves at the pleasure of a governing body--is navigating transitions like the the one I'm currently experiencing.  While I am a critical observer of public administration, I came away from the ICMA conference again impressed by public administrators.  Whether old friends/colleagues or new acquaintances, I found my fellow practitioners pragmatic, thoughtful, and optimistic despite this not being an easy time for those in the business of government.

When I mention the Pew Charitable Trust survey of Trust in Government, many of my colleagues are quick to observe it is the federal rather than local government people distrust.  That is true--a point noted  by the Trust researchers--but it is also true that local government is not immune from the hyper-partisan world within which we live.  One of the themes I encountered during the ICMA conference and during my "lame duck" year is that I'm not alone in sensing things have changed over the past quarter century.  To borrow Galadriel's opening from the Lord of the Rings (movie).  "The world is changed. I feel it in the water. I feel it in the earth. I smell it in the air."

I concede some measure of bias.  For me, my employment world has changed.  While I learned some valuable things at the conference (and watching sessions I was not able to attend due to the laws of physics, i.e., not able to be in two places at once), my mind was occupied by larger thoughts.  I have spent nearly 20 years leading local governments. The time has been profoundly rewarding and, with all due modesty, I think I have done good work.

At the conference in September, I was looking forward to a few months of a sabbatical, a time to rest, reflect, and ruminate about my professional life.  After three months (and over 16,000 miles driving around the U.S.), I have concluded I miss the work and the people.  In Caroline, I left behind some extraordinary professionals... and friends.  I look forward to the opportunity to lead another local government, or--absent a compelling opportunity--to use what I have learned as a leader to the benefit of some organization that shares my core values.

This may be my final report as an ICMA-credentialed manager.  This is my final thought to whomever get stuck reading this report verifying that I have indeed logged the minimum of 40 hours of formal professional development:  The 40-hour rule is silly.  Like every other city/county manager I have spent countless mornings coming in early or evening staying late absorbing new information to cope with the challenge of a job that is constantly evolving, deepening and broadening my grasp on a dizzying array of subjects.

In February, my organization had a data breach.  W-2 information was sent in response to a clever phishing email.  This resulted in mass identity theft including my own.  Within 72 hours, I moved from knowing very little about identity theft to knowing (painfully) a great deal.  And the situation was a tremendous learning experience in crisis management.  Naturally, that doesn't count towards the 40 hours because--in the words of one reviewer--that was me simply doing my job.  My response: the job is the ultimate in professional development, an experience when one is constantly forced to learn, adapt, master, and repeat.

And it's been the best jobs I've ever had.

AirBnB and Uber

AirBnB (and similar services) are a hot topic for local governments.  Like other components of the sharing economy, AirBnB is disruptive to existing business models.  Local governments have developed regulations and tax schemes like hotel taxes and taxi medallions which benefit them and incumbent providers (like hotel chains and cab companies) but penalize consumers.  As often occurs, companies have lobbied local governments to protect their monopolistic positions.  Of course, this lobbying is generally couched in the terms of public safety and welfare rather than protection of monopoly profits.

As a traveler, my experience with the sharing economy has been decidedly mixed.  We have used Uber successfully to get from "Point A" to "Point B."  I think Uber works because a lift (no pun  intended) is rather uniform service.  A great cab ride or a bad cab ride aren't terribly different, as long as you end up at your destination.  Chances are that a person will forget about his or her Uber within moments of settling in at his or her destination.  Overnight accommodations, however, are quite different.  A bad experience years ago at a place called "Berg Tal" has become familial shorthand for a lousy accommodations.

Thus far, our experience with AirBnB has been unimpressive.  In fact, I'm writing this essay from a hotel room after canceling our booking at a local AirBnB in Alaska.

The essential problem of our our AirBnB experiences has been the gap between what is portrayed on the website and what exists in reality.  I'll walk through some of the issues we've encountered.  Earlier this year, we booked a small home in southern Maryland.  As anyone who has spent time in Maryland during the summer recognizes, air conditioning is a necessity.  The small house was reasonably nice but it had one small air conditioning unit in the living room.  To keep the bedroom at a decent temperature (below 80), the living room had to be kept like a meat locker.  Otherwise, the small home wasn't bad and we managed to have a decent stay.

We rented another AirBnB cottage in Pennsylvania on what was accurately portrayed as a beautiful farm.  What wasn't well described was the oddly configured floor plan that including a very steep and narrow staircase between the floors and the fact that amenities like the pool were shared with other rentals.

Our most recent experience in Alaska was a cabin near Fairbanks.  What looked charming on the website was considerably smaller and more rustic in reality.  The deal breaker for us was that the cabin had no seating save a couple of bar stools.  The hotel room we're currently in has three chairs.  The room we had earlier in our stay offered an actual sofa (in addition to a couple of chairs).  I don't want to seem demanding, but if I'm spending three days in a room, I need something more than a barstool.

AirBnB reviews seem less accurate than hotel reviews on Trip Advisor.  Maybe it's a matter of consumer expectations.  Perhaps it's a function of the personal nature of AirBnB and a greater reluctance to post critical comments, or the two-way nature of the reviews.  Whatever the reason, our less-than-stellar experiences have been at AirBnB properties with stellar user reviews.

While I haven't become an AirBnB fan personally, I do think its existence is an economic positive.  Greater competition benefits consumers.  In ensuring a free and open marketplace, the role of local government isn't to pick winners and losers (hotel chains or entrepreneurial homeowners) but to ensure a level playing field.  Hotels have a valid argument in jurisdictions where they pay taxes that AirBnB owners do not.  Local governments also may have legitimate public health and safety concerns like parking problems created by short-term rentals.

The bottom line is that the shared economy can benefit everyone.  The role of the public administrator is to ensure that the public policy conservation is honest, beginning with the motivations of the stakeholders.

Personal: Sabbatical Weeks 3 & 4 (almost)

What seems like months ago, we finished our road trip to Maine.  We stopped by Emmaus to visit the grandchildren.  Our original plan was to roll down to DC, but logistics made it easier to find a hotel in Baltimore to attend the International City/County Managers' Association (ICMA) conference.

The conference gave Becky and I a chance to explore some familiar places between Baltimore and Hunt Valley.  We also discovered a few new places like Johnny Dee's Lounge in Parvkille.

Johnny Dee's is old school Baltimore, a neighborhood joint.  It's the kind of place you come in looking for dinner and you leave with new friends.  The food was great.  The beer was cold.  The company was even better.

After wrapping up the ICMA conference, Becky and I turned north for a final visit to Emmaus.  After enjoying a great time with the kids and grandkids, we turned west to pick up our loaded utility trailer.  The long and winding road has taken us through Laramie, Wyoming, the incredible parks of Yellowstone and the Grand Tetons, to Libby, Montana, my ancestral home.  Time to catch our breath and enjoy a few days of rest before the next leg of our trip.

It is stealing. Period.

At the annual ICMA conference, I attended a round table discussion of city/county manager contracts.  When the subject of vehicle allowances came up, my colleagues were surprised that I had deliberately omitted this provision from my recent agreements.  I also declined to use a county vehicle.  I chose to use my personal vehicle (what we called a "POV" in my military days).  During my seven-year tenure, I also did not submit a single reimbursement request for mileage.

 I doubtlessly logged thousand of miles on County business.  So why decline a vehicle allowance or reimbursement?  I have two basic reasons: One philosophical and one practical.

As a believer in "lead by example," I want to err on the side of not taking advantage of my position.  Refusing any allowance or reimbursement kept me firmly on the moral high ground.  This set a good example for not only the senior management team, but for all employees.

On a practical matter, I avoided the paperwork associated with mileage.  My time is better spent on more "value-added" tasks.  It's also one less avenue of citizen criticism.  Driving a city or county vehicle is just putting a target on a manager's back.  Better to have a vehicle available for fleet use than one for the personal convenience of the CAO.

My philosophy stand in stark contrast to the recent travel-related escapades of some federal officials.  For example, FEMA Administrator Brock Long apparently racked up $150,000 worth of personal travel on the public dime (according to the Office of the Inspector General).  This extravagant spending occurred over a period of months, not years.  I won't bother repeating the details in the report (as reported by the Washington Post), but it's a laundry list of wholesale abuse of government-funded travel.

On a positive note, Long has been ordered to repay the $150,000 to the federal government.  On a not-so-positive note, he hasn't been fired.

Abuse of government-funded travel is theft.  It's abusing the taxpayer and--like all ethically suspect behaviors--it has a corrosive effect on an organization. 

Personal: Sabbatical Week 2

As I'm writing, the Ravens and Broncos are playing in the rain.  The Ravens came to Baltimore the same year I did: 1996.  Twenty-two years (and two Lombardi trophies later), the Ravens are an immutable part of Charm City.  And in an ironic twist, I'm still here--albeit temporarily.  Baltimore is hosting the International City/County Managers' Association (ICMA) conference.  I'll be attending over the next two days.

A week ago, we were settling into our campsite at Mt. Desert Island, Maine.  During our stay in Maine, we traveled north to Lubec, the easternmost town in the continental United States.  Our route to Laramie will cause us to miss the northernmost point in Minnesota, but we shouldn't have any trouble finding our way to the far west of Point Cape Alva, Washington.

I have a photo of Becky at the geographical center of North American (in eastern Montana).  The center of CONUS is in Lebanon, Kansas.  I suppose that makes us geography geeks... or people who like odd roadside attractions.

Back to Maine, we had a great time and the weather was perfect.  We gamely tried the local specialty of lobster.  Becky is a native Marylander and I tend to agree with her: Blue crabs are the better culinary crustacean.  Crab cakes (better yet, rockfish with crab imperial) and freshly-picked silver queen corn are a better plate, at least for my money.

Rural Maine was charming; urban Maine, not so much.  Both at the campsite and in our rambling, we found few people willing to make simple eye contact and impart a traditional "Hello" or "Good Morning."  This stands in stark contrast to other regions.  And let's side aside, for the sake of discussion, the vast legion of humans who wander aimlessly looking at cell phones, utterly oblivious to anything (or anyone) in the immediate vicinity.  Doing a quick shopping run to Target today, I watched three phone watchers nearly collide, only to take different tracks.  We were once mightily impressed with robots that could navigate obstacles.  We seem to have created people with the same sensory ability and motor skills.

Personal: Sabbatical Week 1

I left my position as the County Administrator for Caroline County when my contract ended (September 9).  I'll talk more about my (our) decision to take a sabbatical in another post, but wanted to describe some of the highlights of our first week.

Because our home sold a bit earlier than expected, we needed a short-term rental.  This simultaneously made the moving process easier and harder.  Our initial thought was to go with an AirBnB for the month, but the price and distance were daunting.  Becky tracked down a landlord willing to to a one-month rental.  I'll fast forward through the painful process of emptying our home of seven years, compressing all of our worldly possessions into a 10x20 storage locker, a 16' utility trailer, and a Nissan Titan pickup..., and, of course, the odds and ends necessary to exist in our short-term rental fondly nicknamed, "The Estate."

My final few weeks of work were highly compressed between tying up the loose ends of projects, saying my goodbyes to friends and colleagues, and getting ready to "break camp" from The Estate.  Naturally, our final weekend in Maryland was rainy.  This wasn't a mist, drizzle, or light sprinkler.  It was somewhere between shower and rolling down the window at the Dunkin Donuts drive through to get a bucket of water to the face.

Our last meal in Caroline County was brunch at Turnbridge Point.  Turnbridge has served some of the consistently best meals I've eaten.  Chef Steve turns out wonderful pastries, but he and Rob close the B&B occasionally to host a brunch.  The tickets sell like a classic rock band's farewell tour.  The theme for our September 9 brunch was fittingly, "Maryland."  Unfortunately, we had to have everything packed and ready for the road.

Despite delays due to selling Becky's Mini Countryman and the process of getting new cell phones, we managed to get everything done.  We were on the road for our first "post-Caroline" stop, Emmaus, Pennsylvania.  Our daughter, son-in-law, and three grandchildren live in Emmaus.  Naturally, the rain continued, perfect for yard work and corral repairs.

A good definition of a bad day is one where stepping on a nail in a corral full of horse manure isn't the worst thing to happen.  No, the worst thing to happen that day was having the water heater burst and dewatering a basement with a shop vac while standing in my socks (and a Band-Aid).

We extended our stay a day to help the kids.  To make our schedule, we headed north landing in Vestal, New York for the evening.  The accommodations in Vestal were fine, save our finding the one hotel in the northeast still charging for Wi-Fi.  While that was an inconvenience, it was considerably better than our experience the following night in Montpelier, Vermont.  Without naming any names, our room in Montpelier smelled like damp hopelessness.  The only thing missing from the door was crime scene tape.

As I write, we've stumbled to Bangor, Maine.  It's a quick stop here before heading to a campground on Mt. Desert Island.  I'm almost nervous to say anything because today has been nice.  The rain stopped.  We went to the top of Mt. Washington and enjoyed some remarkable views.  And thus far, nothing is wrong with the hotel.  Perhaps if I save this post very quietly and close my laptop, the Fates will grant us a reprieve for a night?

Ken

My farewell email to staff

All,

Just over seven years ago, I accepted the position as county administrator.  My wife and I wanted to be closer to aging family members on the Shore.  I also saw Caroline as an opportunity to work shoulder-to-shoulder with some remarkable people.  Personally and professionally, my time here has been incredibly rewarding.

It still puzzles me that not everyone recognizes how special Caroline County is, not only as a place but as an organization.  I have worked in the public, private, and nonprofit sectors; organizations as small as our family logging business in Montana and as large as the U.S. Navy.  What happens here doesn’t happen everywhere.  During my tenure, senior managers have passed on pay increases to give more to well-deserving people on their teams.  They’ve declined bonuses, refused reimbursement of expenses, and relinquished valuable contract provisions voluntarily.  I won’t name names to avoid embarrassing (or forgetting) anyone, but it has been inspiring for me to work with such dedicated and selfless leaders.

There is no greater evidence of Caroline’s unique culture than the budget process.  I realize not every employee agrees with “The Caroline Way.”  Some folks think it’s the job of the top person to “bring home the bacon” to a department or agency.  That’s the prevailing approach in many cities and counties.  It’s easy to recognize those places because they often have contentious budget hearings that can run past midnight.  The squabbling usually spills into the local paper.  In a zero-sum budget process where there are winners and losers but the one group consistently getting the short end of the stick is the taxpaying public.  Not here.

In Caroline, every department head and allied agency chief is a community leader first.  You won’t hear these folks asking, “What’s in it for me (or my department)?”  Instead, they ask, “How we can work together to solve the tough challenges we face?”  They advocate for a person and agency across the table.  They trust the process and one another.  This collaborative culture is Caroline’s best competitive advantage.

Let’s be honest, Caroline likely will remain among the poorer counties in Maryland.  As I've said before, coming to Caroline for the money is like moving to Kansas for the surfing.  But there are more ways than dollars to measure wealth.  Whatever Caroline lacks in financial resources is more than offset by the people.  In a word, by you.

I imagine everyone who works for the County could make more money somewhere else.  Those of you who have stayed through the lean times aren’t here for the money.  You’re here because you’ve chosen Caroline County as a place not only to work but to serve.  Through your dedication and the leadership of the Commissioners and other allied agencies, the County has earned the trust and respect of the community.  That support makes tough decisions (like last year’s income tax increase) possible.  The ability to make those tough decisions is why Caroline County will eventually pull ahead of those other counties, you know, the ones with the expensive, waterfront estates.  (I really am going to miss smack talking the other counties.)

A parting word of warning: The greatest challenge facing Caroline isn't unfunded mandates from the State of Maryland or another economic downturn.  Together, we've survived tough times and come out stronger.  No, the danger is forgetting who we are and how we've come to this point.  The County isn't simply a place or an organization.  Caroline truly is a way.  It's a way of working, doing business, and living.  It existed long before I arrived but for seven years, it has been our way.

It is my sincere hope it will remain yours for many years to come.  Thank you and all my best.

Ken Decker

Management Discussion & Analysis

I recently began my 20th year as a local government chief administrative officer (CAO).  One of my annual tasks is to write the "Management Discussion and Analysis" (MD&A) for the annual financial audit.  While many CAOs delegate this task to the Finance Director or Comptroller, I enjoy the challenge of unpacking the dense audit into readable prose.  My most recent MD&A is a first draft (which is why there are blanks for some numbers), but I think it captures my sense of what an MD&A should be:

Executive Summary

Management Discussion and Analysis

Caroline County Government, FY 18 Financial Audit

“This MD&A section of the financial report should be brief and objective and should be easily readable by an average reader, one not possessing a detailed knowledge of accounting.” Government Accounting Standards Board, Statement 34, June 1999

Very few Caroline County residents will ever read a County financial audit.  This is understandable.  Audits have a well-deserved reputation for being dry, boring, and full of numbers.  The Government Accounting Standards Board (GASB)—a rather dry organization itself—recognized this problem and adopted a requirement for every local government audit to have an introduction written in an understandable and conversational style.  This introduction—what you are reading now—is called the “Management Discussion and Analysis.”

The goal of the MD&A is to provide a plain language summary of the complex data in the audit.  It also serves other important purposes: It is a chance for the senior management team to speak candidly about the financial strengths and weaknesses of the organization, to discuss future challenges and opportunities, and to create a fiscal “trail of breadcrumbs” for future managers to follow.

 

The basic question the audit seeks to answer is: Is the County doing OK financially?  For fiscal year 18 (the period ending June 30, 2018), the answer is, “Yes.”  And “mostly.” 

The County ended the year “in the black,” accounting jargon for having higher operating revenues than operating expenses.  As a general rule, this is better than ending the year “in the red.”  The excess of revenues over expenses rolls into the County’s general unrestricted reserves.  This is accounting jargon for the County’s available cash account.

For each of the past seven years, the County has ended in the black.  During this time, the Commissioners occasionally have withdrawn money from reserves to fund capital expenses.  (Capital expenses meaning investment in vehicles, heavy equipment, buildings, and infrastructure.)  Despite these drawdowns, the unrestricted general reserves have grown to $____________.  This is a positive trend.

To evaluate a local government’s financial health, one of the measures frequently used is unrestricted general reserves as a percentage of operating expenses.  There are numerous “rules of thumb” ranging from one month’s expenses (8.3 percent), 10 percent, two month’s expenses (16.6) percent, 20 percent, or 25 percent.

The County’s adopted policy is not to allow reserves to dip below 5 percent.  As noted by auditors, bond rating agencies, and the senior management team, this is too low.  While the policy has not been amended, a goal of the senior management team has been to build the unrestricted reserves beyond the 5 percent threshold and to encourage the Commissioners to adopt a higher number.  This recommendation is 10 percent in the short term; 16.3 percent in the longer term.

Building reserves (and prudently managing the County’s finances) relies on projecting revenues conservatively and estimating expenses aggressively.  This is how the senior management team built the FY 18 budget.  As evidenced by this audit that process was successful.  At the close of the accounting period, the County had received $___________ more in revenues than expenses.

Before going further, it is important to note that the audit is primarily a one-year snapshot of the County’s finances.  In the MD&A, the senior management team will talk about the past and look into the future, but nearly all the numbers in the audit apply to fiscal year 2018.  As with all audits, it is important not to read too much into any single year.

Revenues

To begin explaining the audit, it helps to understand the County’s sources of revenues.  The two major revenue streams are property taxes and income taxes.  The State of Maryland assesses the value of all real estate.  The Commissioners set the County’s tax rate.  With the County, there are 10 incorporated municipalities (cities and towns) that impose property taxes as well. 

In the FY 18 budget, the Commissioners left the property tax rate unchanged at 98 cents per $100 of assessed value.  Caroline has the ________th highest property tax rate among Maryland’s 23 counties and Baltimore City, essentially “middle of the pack.”  The total amount of property taxes collected in FY 18 was $___________.

Income taxes are different.  While the State of Maryland collects income taxes, the process is a “black box” for local governments.  The State refuses to give local governments raw income tax data so the revenue can be difficult to predict.  During the budget process for FY 18, the County Commissioners left the income tax rate unchanged at 2.73%.  During the year, however, the Commissioners voted to increase the rate to 3.2%, the maximum allowed by state law.

Driving the decision was recognizing the need to replace Greensboro Elementary School and to build a new building for the Caroline County Sheriff’s Office.  Absent the increase in income taxes, the County lacks the revenues to support the debt for the two major projects.  In FY 18, the County received $____________ in income tax revenues.  Overall, other revenues like user fees remained stable.

Expenditures

FY 18 was a relatively routine year for expenses.  As noted in previous audits, a majority of County expenditures are mandatory—either an obligation of state law like funding the K-12 education system or paying obligations like debt service.  Expenditures like the County’s ambulance system are not legally mandated, but most residents would consider the service essential for public health and safety.

By category, Caroline County expenditures largely parallel other Maryland’s counties.  The single largest expense is labor in the form of wages and benefits.  The County has about 160 full-time employees in its nine departments.  The County also provides payroll and human resources support for some “local” state agencies like the Circuit Court and State’s Attorney’s Office.

In the FY 18 budget, the Commissioners approved a 3 percent pay increase to employees and adopted a new grade/range pay scale.  The Board added two new positions for road deputies in the Sheriff’s Office, making another step towards the goal of adding five new officers before the end of the Board’s term.  The Board also converted four part-time EMS positions to full-time positions.  This reduced the EMS system’s reliance on part-time EMTs and Paramedics to fill shifts.  In FY 18, the County completed its transition to a “living wage.”  Under this policy, the minimum annual wage for a full-time County employee is $30,900.

The Commissioners also made some structural changes to local government services.  The Board dissolved the longstanding Memorandum of Understanding (MOU) with the Caroline Economic Development Corporation (CEDC), choosing to bring economic development “in house.”  This move allowed the CEDC Board to focus on tourism and for the Commissioners to have more direct control over economic development activities.

The Commissioners made a similar decision regarding animal control.  Traditionally, the Caroline County Humane Society has fielded the County’s Animal Control Officers (ACOs).  The Board believes that ACOs are public safety employees deserving of a pay structure and benefits on par with other similarly-situated County employees.  The three ACOs hired by the Humane Society were transitioned to County employment in FY 18.  The economic development decision was budget neutral.  The change to animal control represented an increase in costs.

The only budget reduction in FY 18 was a decrease to Delmarva Community Transit.  In FY 17, the Commissioners approved an increase of $15,000 to provide additional services.  Since these services never materialized, the Board returned the funding to the FY 17 level.

Debt

In FY 18, the County’s bond rating remained AA-.  This is essentially the County’s credit rating.  This is a lower rating than more affluent Maryland counties, but the bond rating agencies have commented favorably on Caroline County’s strong management, improving financial position, and relatively low debt.  The agencies also correctly noted that the County has a relatively small economy heavily dependent on agriculture.  Much like a credit rating for a consumer depends on income, our bond rating is limited by our modest tax base.

The County did not issue any new debt in FY 18.

Capital

In government accounting, capital expenses are commonly defined as purchase of an asset greater than $5,000 in value and with an expected useful life of five years or longer.  Common examples are buildings, equipment, and vehicles.  Setting aside K-12 schools, public libraries, and property owned by allied agencies, the County owns 399 miles of treated roads, 78 miles of dirt roads, 39 bridges and structures, over 250,000 square feet of buildings, and over $10 million in vehicles and heavy equipment.

FY 18 marked the second consecutive year the County funded a normal capital budget.  The FY 18 capital improvement plan (CIP) totaled $6.69 million but that number may be misleading.  About $594,000 represented unspent capital projects rolled over from the prior fiscal year.  Some of the CIP reallocated $562,000 of unspent bond funds recovered from the Preston Elementary Renovations.  About $1.8 million are expenditures related to sources like grant funds or dedicated revenues.

What is important to note is that FY 18 capital investment was funded by a $2 million drawdown of the County’s unrestricted general reserves.  The Commissioners made a similar decision to fund capital in the FY 19 budget.  These were necessary measures to continue capital investment and address the “deferred maintenance” challenge, however, it is not sustainable in the longer term.  Given the County’s total infrastructure—vehicles, equipment, buildings, roads, and bridges—the capital budget should be between $3 million and $4 million per year, and that money should come largely from operating revenues.

Unfunded Liabilities

“Unfunded liability” is an accounting term.  It is essentially a promise to pay something in the future where the necessary funds have not been set aside yet.  This term is most commonly used when referring to pension plan and retiree health care plans.

Unfunded liabilities are a big deal, particularly for local governments—so much so that the Government Accounting Standards Board (GASB) adopted Statements 67 and 68.  These statements updated the standards for local governments reporting pension liabilities.  This occurred because some local governments were not reporting liabilities accurately.

Caroline County has its own pension plan and retiree health care benefit plan.  This is somewhat unusual in Maryland where many counties participate in the State of Maryland’s plans.  The pension plan is supported by the County’s pension fund.  Retiree healthcare is funded through the Other Post-Employment Benefits (OPEB) fund.  As noted in previous audits, the County has made steady progress improving the pension fund by: 1) reforming the pension system; 2) phasing in employee contributions; 3) paying more into the pension fund than the required annual contribution.

As you may read later in the audit, the County’s total pension liability was $____________ at the end of the fiscal year.  The pension fund had $____________ in assets.  This means the County has an unfunded liability of $____________ and that the plan is ________% funded.  The goal of the County’s Pension Board is to reach 100 percent funding with a lower expected rate of return on investments.

It’s important to note that the pension liability is an estimate based on some best guesses.  These guesses are made by an independent professional actuarial firm, not the senior management team.   

The most important guess is the rate of return the pension fund will earn on its investments.  The current estimate is 7.15 percent although the Pension Board has voted to slow reduce the number to 7 percent.  This slow reduction in the expected rate of return makes the County’s pension fund seem less well funded, however, making the estimate more conservative means the pension fund is better funded.

Caroline County is the only jurisdiction in Maryland whose OPEB plan is over 100 percent funded.  This is due to two reasons.  First, the County offers only a modest Medicare supplement plan and does not subsidize health insurance for employees under age 65.  Second, the County set aside money for the OPEB fund before the Great Recession.  Careful management of those funds has resulted in a plan that is ________% funded.

Over the past seven years, the County has addressed other unfunded liabilities like the past policy of cash payouts for accrued sick leave on retirement.  The previous Board of Commissioners paid employees for some accrued sick leave and changed to pension plan to allow conversion of all unused sick leave into pension service credit at retirement.

Along with the improvement in unrestricted cash reserves, progress on unfunded liabilities has been a major financial accomplishment for the County.  It bears mentioning, however, that both the pension and OPEB funds are comprised of a mix of investments including equities.  The U.S. stock market is in the midst of the longest “bull market” in history.  Sooner or later, the economy will cool and the stocks will tumble in a “bear market.”  The senior management team strongly believes the County should continue decreasing unfunded liabilities to allow the pension and OPEB funds to endure a market correction.

Municipal Property Tax Differential

Property owners in Caroline’s five largest towns receive a break on their County taxes.  While not required by law, the Commissioners have continued to provide this benefit, foregoing about $_________ million cumulatively in property tax revenues over the past six years.  The five smallest towns receive support in the form of direct payments.  For the FY 18 budget, the Commissioners followed the differential formula established in 2012.

Summary

The goal of this executive summary is to explain the annual audit—the snapshot of the County’s FY 18 fiscal year—in plain language.  If you have read to this point, congratulations!

Buried amid the mountain of data is a simple message.  FY 18 was a good year.  The County continues to improve financially.  Services have been expanded and, in some instances, restructured.  The Commissioners have continued a focus on public safety.  The collaborative budget process—the Caroline Way—has minimized conflict and competition.  The relationships between the County and allied agencies is as strong as in any county in Maryland.  After the pain of the Great Recession, the collapse in housing prices, cost shifting by the State of Maryland, and draconian cuts in funding, the County has largely recovered.

The Commissioners made a critical decision to increase the income tax rate during the year, a financially prudent measure necessary to build a new building for the Sheriff’s Office and to replace Greensboro Elementary School.  Of all Board decisions made in the past decade, that likely will prove the most significant.

Like every Eastern Shore county, Caroline faces some significant challenges.  The regional labor market has tightened.  Some departments have struggled to recruit and retain entry level employees.  There are signs of inflation—the general increase in prices.  Interest rates are increasing and some expenses are increasing at a higher rate than the County’s tax base is growing.  Perhaps the biggest challenge for the County is truly balancing the budget, i.e., funding a sustainable capital improvement plan without drawing down reserves.  The senior management team is hopeful that the income tax increase will allow this to occur.

Despite the challenges, Caroline County has proven exceptionally resilient.  A fiscally conservative governing body is supported by a capable management team.  While not readily evident in the audit, the strength of Caroline is its team of leaders committed to collaboration, cooperation, and community.  As long as this unique culture exists, the senior management team believes the County financial progress will continue.

The predictable fate of the newspaper

While not one often to admit it in mixed company, one of my degrees is in journalism.  When I arrived at university, I told my Jesuit advisor I wanted to write and was thinking about majoring in English.  He tartly observed that English majors study what other people have written; journalism majors write.

Not long ago the Baltimore Sun's editorial board responded to a request from the Boston Globe to opine on the dangers of an assault on free press.  A snippet from that editorial:

"So that’s the goal: to assess, analyze and uncover truth. That’s obviously easier said than done, and our profession’s “truths” do not always reflect the entire public’s — particularly those on the right. While we try to keep our personal feelings out of our work, they can still unintentionally influence the things we cover and the way we cover them. And to many, that’s a failure on our part — one we’ve largely been given a pass on in the past. But not in today’s partisan climate."

Newspaper circulation has dropped below what it was in 1940.  Newspapers had it good for decades, but when technology changed the nature of mass communication, they were slow to adopt as an industry.  One of the reasons is arrogance.  Newspapers largely survived the advent of television news albeit with no small measure of diffidence towards the purportedly less serious medium.  What happened along the way, however, was the vast diminishment of "two paper towns."  As newspapers settled into comfortable local monopolies, they did what monopolists do.  They stopped caring about innovation, customers, and costs.  They lobbied Congress to block electronic classified ads and other competition.  Newspapers attempts to transition to the digital medium was inevitably ham-handed.  When the lower transactional cost of the Internet and low/no cost sites like Craigslist, newspapers simply lumbered along like dinosaurs looking for a tar pit.

Another factor is that newspapers began drifting away from the role of informing into the role of opining.  Pick-and-shovel journalism is hard work, and often tedious.  During my nearly 20 years leading local governments, I've often apologized to reporters covering public meetings with a version of, "I'm sorry you had to sit through that."  And I've been quick to praise lucid, well-written news stories about rambling, difficult-to-follow public discussions.  Great local reporters are rare and incredibly valuable.  On that note, a tip of my hat to Abby Andrews, local government beat reporter for the Times Record who has proven one of the best.

Tip O'Neill is most often given credit for the phrase, "All politics is local."  I think there's an argument to made be that all journalism is local.  Great reporting will always be great reporting.  And there will always be a market for accurate, timely, local information.  What the editors at the Baltimore Sun dismiss is any recent assault on the free press pales in comparison to the damage newspapers have done to themselves.

Dude, Where's My Car?

The City of Albuquerque has it!

Some of New Mexico's cities have a penchant for seizing vehicles, so much so that the State Legislature changed the law to prevent its municipalities from financially benefiting from civil forfeitures.  Albuquerque did not "get the memo," but they received a new one from U.S. District Court Judge James Browning on Monday.

Judge Browning found the City's vehicle forfeiture program unconstitutional.  Specifically:

"The Court concludes that the City of Albuquerque has an unconstitutional institutional incentive to prosecute forfeiture cases, because, in practice, the forfeiture program sets its own budget and can spend, without meaningful oversight, all of the excess funds it raises from previous years. Thus, there is a 'realistic possibility' that forfeiture officials’ judgment 'will be distorted by the prospect of institutional gain.'”

The case that precipitated the legal decision involved a woman who lent her car to her adult son.  The son was arrested for DUI and the City seized the car.  In a Kafka-esque twist the City apparently offered to sell the mother her car for $4,000 if she agreed to have it booted for a year-and-a-half.  So, an innocent woman lends her car to a family member.  The family member (allegedly) breaks the law and, in turn, a municipal government tries to extort $4,000 and an agreement to immobilize a car she is still making payments on?

Albuquerque has a Chief Administrative Officer: Sarita Nair, JD, MCRP.  Ms. Nair not only is an attorney, she is reportedly "AV-rated by Martindale Hubbell, and has been recognized by Best Lawyers, Southwest Super Lawyers, and Chambers & Partners USA."  So, how exactly does a municipal government with an annual budget of nearly $1 billion managed by a "super lawyer" end up running a program that flouts state law AND the Constitution?

I'll let economist Steven Landsburg provide the answer:

“Most of economics can be summarized in four words: “People respond to incentives.” The rest is commentary.”

Local governments are--contrary to the suspicions of some citizens--organizations comprised almost entirely of people.  Individually and collectively, those people respond to incentives.  And there is something more going on.  The average citizen is likely to recoil in horror hearing the story of an innocent woman having her car seized by the government.  The average third-grader would find it patently unfair.  But something happened in the City of Albuquerque, a change in the culture that allowed the unacceptable to become acceptable, commonplace, routine.

One of the jobs of the local government CAO is to remain ever watchful and vigilant of an organization's culture, to ask the difficult moral questions, to challenge complacency and the "this is the way we've always done it" trap.  And the wise CAO understand the power of Landsburg's observation.  We all respond to incentives, so it is critical that the structure of our organizations reward us for doing the right things.

The Van Gogh House

From the Orlando Sentinel:

"In a bizarre ending to a quirky story, Mayor Nick Girone will have to publicly apologize on behalf of the city to a couple who racked up more than $10,000 in fines for painting their home in the likeness of Vincent van Gogh’s famous painting 'Starry Night.'"

I had not heard about the story until this denouenment.  Mount Dora, Florida, is home to about 12,500, large enough to have a professional city manager.  According to the City's website, that manager is Robin R. Hayes.  It's impossible to know what Ms. Hayes provided in the way of professional guidance to Mayor Girone.  Hopefully, it was that the city's dogged bullying of homeowners Lubomir Jastrzebski and Nancy Nemhauser was doomed, particularly when the couple decided to retain legal counsel.

The judicial branch indulges a good bit of tomfoolery from local governments, but takes a dim view on trampling the First Amendment, particularly when a citzen's expression is creative/artistic.

I have no doubt that neighbors and local scolds found the "Van Gogh House" irksome.  And apparently the reason the couple chose to make their home into an objet d'art--an autistic son--did not thaw the ice of disapproval.  But Mount Dora is not a homeowner's association where individuals can agree contractually to a color palette approved by an architectural committee.  It is a city where its citizens enjoy the protections of the Bill of Rights.

Mayor Girone presumably will deliver a public mea culpa, but he owes an apology to the Constitution, not just his constituents.

Risk matters

(Not the game by Milton Bradley)

I open with a passage from an email I sent senior staff a few years ago:

"I’m strongly committed to providing a safe and healthy workplace for employees.  I’m also committed to maintaining public access to our public buildings.  A perfectly safe environment simply does not exist.  Our job is to carefully the real risks against the real costs and make thoughtful decisions.  While we may have employees worried about a mass shooting or act a violence by a member of the public, the odds of that occurring are incredibly low.

Our responsibility—as department heads and professionals—is to build “the management case” for our decisions.  In my experience, people do a terrible job of assessing risk.  Psychology Today agrees.  (Bonus points to anyone who gets 100 percent right on the quiz.)   If you prefer something more academic, you might try “Overreaction to Fearsome Risks.”  Or for a middle ground, this blog page by Bruce Schneier."

Why do administrators--who generally advocate a calm, data-driven approach to evaluating risk--become speed bumps in legislative overreactions to unfounded fears?

There are some obvious answers.  Legislative bodies are more influenced by voter perceptions (valid or not) than by data.  If the vox populi demands things that make them feeler safer (rather than actual being safer), they are entitled because "democracy."  Failing to take action against a perceived threat--however unlikely--opens one up to the accusation of "not caring."  Perhaps the most obvious... people regardless of education and training are not good at evaluating risk.

Delving a bit deeper, there are more satisfying answers.  Every public policy--no matter how ill-advised--benefits someone.  For example, the United States spends over $7 billion a year on the TSA for security theater rather than actual security.  That sum goes to far more than rank-and-file employees.  Entire industries are built around monetizing fear.  This is less an issue in the private sector.  In corporate America, money spent on security is weighed against other potential investments.  The issue is far more pronounced in government where the few who benefit greatly speak more loudly than the many who pay slightly.  Perhaps the biggest obstacle to rational decision-making in the face of fear is the pervasive expectation for government to "do something," even when the most pragmatic approach is to do nothing.

After all, one might think, why does government exist save to do something?  And in no small measure that is why the hammer of government sees every problem as a nail... even when the "problem" is a barely visible crack in a beautiful stained glass window.  As public administrators, we cannot fall victim to the "what if" game, playing perpetual defense against threats less likely than winning the lottery.  We need to lead discussions on risk, not simply react to them.