* dENSA SPOKANE
Like MENSA, Only Thicker

Czarbage

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Open Letter to the Mayor of Airway Heights

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Dear Mayor,

Thank you, for your interest in Regional Solid Waste matters.

It appears the county will soon adopt a Solid Waste Management Plan, which will then make its way to your jurisdiction for approval.

There is a high probability that a series of conflicts will develop in the future if the city moves to interpret the plan differently from what the county thinks the plan intends.  The intent of the plan is overly-broad, and will actually be determined by the City of Spokane at some future date.

Various dENSA members have advised the county to clearly express regional priorities and goals in this plan on behalf of county rate payers, and to speak definitively on critical issues like flow control and independent accounting authority over rate payer funded organizations.   It appears the county will remain silent on these matters.

There is probably not much that can immediately be done about the state of Spokane politics; so there is a bad plan coming your way.  This plan will likely soon become the City of Airway Heights’ own; however, there are a series of options available that might let your city avoid some of the economic carnage that will probably result from this nebulous plan.

Consider that the City of Spokane’s 2009 solid waste budget is $141 million and the rest of the county’s collection and related disposal cost is estimated around $60 million.  This is  $200 million annually and $4 billion over twenty years for our county-wide municipal waste stream in today’s dollars.  If costs grow at a typical 5% the cost will be $530 million annually in twenty years.

This is a big number for a county with little population or industry, and it does not include adjustments for inflation, new mandated environmental costs, or volatile energy demand and supply.  Given current service levels, the cost of the Regional Solid Waste System should probably be closer to half of what it is today, and the private sector could probably come in at around a third of current cost.

Note: The $141 million was taken directly from the City of Spokane 2009 adopted budget.  This number is up from about $133 million in 2008.  It is likely that not all of this is for actual solid waste spending, but dENSA has been unable to reconcile many of the city’s financial representations.  The cost estimates exclude significant private sector disposal costs, which circumvent the regional system for a myriad of reasons.

dENSA has repeatedly found Spokane City fiscal representations to be unreliable, so it is impossible to confirm actual disposal and recycling cost; however, dENSA can confirm that Spokane managed waste operations are very expensive.  The city officially represents otherwise.

Some jurisdictions will likely recognize that if they leave the system the cost of a key utility will drop significantly, benefiting resident ratepayers and making their communities more attractive to business investments, which often is followed by new jobs.   If jurisdictions begin dropping out, the system could experience severe financial stress.

This is one of several risks to the City of Airway Heights due to your existing contractual commitment to fund the system; however, your city’s waste management plan could provide options that would help limit this risk in the future, and expressly guard against a few other scenarios.  Essentially, if you want out from under this risk, then plan to get out from under it; you don’t require the City of Spokane or the County’s permission relative to the Airway Heights’ Solid Waste Management Plan.

You should consider modifying the Solid Waste Plan to protect and benefit Airway Heights citizens and businesses.  Make the plan optional except where bound by inter-local agreement or state / county law; and make it clear that you intend to reserve the power of decision over flow control. This power is currently surrendered to the City of Spokane, but we strongly advise that your city plan to get this power back and safeguard it.  It is essentially equating to taxation without representation, in the sense that anything above the fair market cost of disposal acts as a tax on your citizens, the benefits of which flow to another jurisdiction. This is very problematic, and your solid waste plan should probably seek a remedy.

Airway Heights has a few additional options that are not widely available to other jurisdictions, which dENSA can share with you another time.

Please let dENSA know if it can be of further service relative to regional solid waste matters.

Best Regards, from the Secretary of dENSA

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City of Airway Heights

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From the Free Spokane Blog at: http://www.freespokane.net:

Tale of Two cities, by Contrarian

During a recent conversation over coffee an acquaintance posed the question, “What does Spokane have going for it?”

My immediate and glib answer was, “Not much.”

No, I’m not a reluctantly relocated Seattleite, nor an exemplar of Spokane’s alleged inferiority complex. Spokane does have a number of significant assets, which Greater Spokane, Inc. and the Visitors Bureau regularly tout: affordable housing, minimal traffic congestion, decent schools, first-class medical services, outstanding outdoor recreational opportunities, and so on. The thrust of the question, though, was, “What does Spokane have to offer that other mid-sized Western cities don’t?”

The fact is that such cities as Anchorage, Albuquerque, Boise, Salt Lake City, Colorado Springs, Tucson, Reno, and other Western cities in Spokane’s size class also offer all of those same attractions. Like Spokane, they also offer a range of entertainment and cultural venues and events typical of cities of their size.

It should be noted, first, that being in that population class is itself an asset in the first decade of the 21st century, as more refugees flee the congestion, crime, high cost of living, and general stresses of the megacities. The Spokane area will continue to attract a share of those folks no matter what we do, though a disproportionate fraction will probably end up on the Idaho side of the state line. Spokane has seen growth over the last two decades, but all of the above cities have seen more.

Spokane does have one asset most of its peers lack — an urban texture found, in the West, only in San Francisco, Seattle, Portland, Denver, and to a lesser degree, Salt Lake City. Spokane attained city-size early (104,000 by 1910) and thus has a rich legacy of urban architectural styles ranging from Chicago School to Greek Revival, Romanesque, Norman, and Gothic to Art Deco, and distinctive neighborhoods of Victorian, Queen Anne, Tudor, Prairie and Craftsman homes. The large downtown core developed during the city’s development heyday (1890-1930), with its numerous historic and
otherwise noteworthy buildings, remains mostly intact, attractive and healthy, despite the downsizing which occurred between 1950-80, when many older blocks were demolished and replaced with surface parking lots.

Offsetting this advantage, however, is one conspicuous disadvantage — the lack of a major research university, something each of the peer cities mentioned above can offer. Although WSU continues to expand offerings at its Riverpoint campus and Greater Spokane CEO Rich Hadley has recently declared that Spokane will have “a full 4-year medical school within 5 years,” those improvements, if they happen, will only bring Spokane up to par with its rivals; they will not give it an edge.

How might it gain that edge?

Spokane should perhaps consider the case of Charlotte, NC.

Like Spokane, Charlotte began life as a market town (cotton, in Charlotte’s case) and during the 19th century became a railroad hub. But by 1910, when Spokane’s population had already grown to 104,000, Charlotte’s had reached only 34,000. Charlotte grew more rapidly during the first half of the 20th century, but in 1950 was still smaller than Spokane (134,000 to Spokane’s 161,000).

Charlotte today has a population of 717,000 (2.3 million in the CSA), its median household income exceeds Spokane’s ($51,050 to Spokane’s $37,899), it has less poverty (12.7% to Spokane’s 18%), and it is the 2nd largest banking center in the US, after New York City. Despite its prosperity and rapid growth, it’s cost of living index is slightly lower than Spokane’s (90 to Spokane’s 91), and its housing is even more affordable. It consistently ranks among the top 10 on everyone’s “quality of life” indexes.

How did that happen?

Well, it occurred because the state of North Carolina had long had very liberal banking laws, allowing banks to operate statewide (when many states restricted banks to one county), to acquire banks and other assets outside the state, and to offer a range of financial services prohibited by banking laws in most other states. As a result N. Carolina banks acquired expertise in managing multiple branches in multiple markets, and in handling financial products off-limits to banks elsewhere. When federal laws on interstate banking were relaxed in the 1970s and other states began to relax their own laws, Charlotte’s two large banks were ready (both were managed by astute and aggressive CEOs). They began acquiring banks in other states left and right, including, eventually, the Bank of America, largest bank in the US. The rest, as they say, is history. Over 30,000 people are today employed in Charlotte’s two largest banks alone.

http://findarticles.com/p/articles/mi_qa3647/is_199601/ai_n8737985/

http://www.post-gazette.com/pg/06176/701039-28.stm

What is the lesson here? Well, that thoughtless regulation inhibits economic activity, and repealing those regulations unleashes it. Most states have now followed N. Carolina’s example and relaxed their own banking laws, so Spokane would not be able to gain its edge in that field. But there are innumerable other fields in which government regulation stifles innovation and adds enormously to the cost of doing business in most states, particularly local land use and environmental regulations. Spokane could gain an edge similar to Charlotte’s in many other economic areas by immediately:

♦ Repealing all land use laws and development restrictions not directly related to preventing nuisances or protecting public health and safety, and

♦ Repealing all environmental laws not directly related to protecting human health or preserving the utility of “natural commons.”

Some of these are state laws, of course, especially the ill-conceived and burdensome Growth Management Act, which local officials could not change, at least not immediately. But there are numerous local legal impediments to economic development, notably the Comprehensive Plan, which could be repealed by a vote of the City Council.

The Comprensive Plan declares, “The overall purpose of the comprehensive plan is to provide Spokane residents with a high quality of life.” It then proceeds to ignore the most important components of a high quality of life, the two upon which all other factors depend: good incomes from interesting and challenging work, and a wide range of lifestyle options from which each person can freely choose. Instead, it erects impediments to economic opportunity and narrows options in an attempt to improve the quality of life of politicians, planners, and their more vocal political patrons.

Free Spokane would be the city in which if someone wants to build something or produce something, he would almost certainly be able to do it, and do it quickly, without the delays and costs (for attorneys, consultants, neighborhood schmoozing, hearings, lawsuits, and appeals) which he would likely be compelled to endure elsewhere.

It’s time for Spokane’s elected officials to get serious about economic development and come to grips with the factors which inhibit it.

Additional comments regarding the above article can be found at the Free Spokane website at http://www.freespokane.net/?p=134

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60-337_City-of-Spokane_97th


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From the editorial page of the Wall Street Journal 9/1/03

The Coming Deposit Insurance Bail Out

Americans are about to re-learn that bank deposit insurance isn’t free, even as Washington is doing its best to delay the coming bailout. The banking system and the federal fisc would both be better off in the long run if the political class owned up to the reality.

We’re referring to the federal deposit insurance fund, which has been shrinking faster than reservoirs in the California drought. The Federal Deposit Insurance Corp. reported late last week that the fund that insures some $4.5 trillion in U.S. bank deposits fell to $10.4 billion at the end of June, as the list of failing banks continues to grow. The fund was $45.2 billion a year ago, when regulators told us all was well and there was no need to take precautions to shore up the fund.The FDIC has since had to buttress the fund with a $5.6 billion special levy on top of the regular fees that banks already pay for the federal guarantee. This has further drained bank capital, even as regulators say the banking system desperately needs more capital. Everyone now assumes the FDIC will hit banks with yet another special insurance fee in anticipation of even more bank losses. The feds would rather execute this bizarre dodge of weakening the same banks they claim must get stronger rather than admit that they’ll have to tap the taxpayers who are the ultimate deposit insurers.

It isn’t as if regulators don’t understand the problem. Earlier this year they quietly asked Congress to provide up to $500 billion in Treasury loans to repay depositors. The FDIC can draw up to $100 billion merely by asking, while the rest requires Treasury approval. The request was made on the political QT because, amid the uproar over TARP and bonuses, no one in Congress or the Obama Administration wanted to admit they’d need another bailout.

But this subterfuge can’t last. Eighty-four banks have already failed this year, and many more are headed in that direction. The FDIC said it had 416 banks on its problem list at the end of June, up from 305 only three months earlier. The total assets of banks on the problem list was nearly $300 billion, and more of these assets are turning bad faster than banks can put aside reserves to account for them. The commercial real-estate debacle is still playing out at thousands of banks, even as the overall economy bottoms out and begins to recover.

Meantime, even as it “resolves” and then sells failed banks, the FDIC is also guaranteeing the buyers against losses on tens of billions of acquired assets. This is known in the trade as “loss sharing,” which is another form of taxpayer guarantee that taxpayers aren’t supposed to know about. Most of the losses won’t be realized if the economy recovers. But this too is a price of taxpayers guaranteeing deposits. Even as Treasury and the press corps broadcast that the feds are making money on TARP repayments, these guarantees go largely unnoticed.

FDIC Chairman Sheila Bair continues to say that deposits will be covered up to the $250,000 per account insurance limit, and of course she’s right. But we wish she’d force Congress—and the American public—to face up to the reality of what deposit insurance costs. Amid the panic last year, Congress raised the deposit limit from $100,000. While this may have calmed a few nerves—though the worst runs were on money-market funds, not on banks—it also put taxpayers further on the hook.

The $250,000 limit was supposed to expire at the end of 2009, but in May Congress extended it through 2013, and no one who understands politics thinks it will return to $100,000. The rising bank losses mean that the FDIC’s ratio of funds to deposits is down to 0.22%, far below its obligation under the insurance statute to keep it between 1.15% and 1.50%.

Rather than further soak capital from already weak banks, the FDIC ought to draw down at least $25 billion from its Treasury line of credit. Ms. Bair is going to have to ask for the cash sooner or latter, and she might as well do it before the fund hits zero and we get another round of even mild depositor anxiety. We suppose Congress could raise a faux fuss, but these are the same folks who ordered the FDIC to broaden the insurance limit. They need to face the political consequences of their promises.

wsj.com

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The New One Dollar Bill?

The New One Dollar Bill?

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