Liberal and Loving It

How Colorado can support small businesses

The Colorado state government helps certain classes of business. Large businesses, and businesses who have enough financial interests in front of the state. Both have lobbyists, consultants, etc. who work effectively to get their needs in front of our state's leaders. Sometimes they get their way. Sometimes they don't. But they get support.

And then you have businesses that the state chooses to pay attention to. In the case of the Ritter administration this falls into two groups, green energy businesses both in the state and ones they try to bring here. And targeted industries where they try to get companies to open facilities in Colorado (but ignore ones already in Colorado).

So who is missed in this? The vast majority of businesses in the state – small and medium businesses (aside from those industries who sell primarily to the state). Ok, so the state favors a few and ignores the rest – but we live in a free enterprise system. So shouldn't we just figure that's the way it is supposed to be (aside from those that Ritter chooses to elevate)?

Well, yes and no. Because it is in the state's interest to look at local businesses for two very important reasons. Reasons of self-interest. Reasons that will benefit the state and its residents.

First let's look at two companies that sell absolutely identical products, provide identical service, at the same price. So it makes no difference to the state, absolutely no difference, which it buys from. But if the state buys from a local company and because of those purchases has to hire 2 more people, then 2 people go off of unemployment and instead become taxpayers. Those two people move from the debit to the credit side of the state's ledger.

On the flip side, if the state buys from an out of state company, those two people remain on unemployment. So all things being equal, there is value to the state in purchasing locally.

Second let's look at two companies where one is a large multinational (i.e. out of state) and the other is a small (usually local) company. And the small company has a better product. The state is better off if it uses the better product. But the large company has a lock on the state where the state is not interested in looking at alternatives.

So the state spends more money than necessary, money that could otherwise go to underfunded parts of the state budget. And at the same time the state ends up with more unemployed and fewer taxpayers.

I am not proposing a repeat of the ultra-dumb Always Buy Colorado. The point is not to force purchases from local companies because that can saddle the state with inferior products.

Instead what I propose is to create an SBA for the state – a small group focused on making state agencies take a real look at local alternatives for products & services they buy. That's it – just make them fairly evaluate local companies as alternatives. The return to the state in reduced unemployment, increased tax revenue, and improved efficiencies should more than pay for this effort.

And to those that say, well of course the state does this – no it doesn't. To use a personal example, for two years we have attempted to get the OIT to take a look at our product. Not to buy it – just to look at it. We've got the state complaining that it can't create the reports required by the stimulus package – and we still can't get the state to even look at our system (which can do this better than what they have in place).

Even if Governor Ritter is not interested in supporting local businesses (unless they are very large or green), he should at least be interested in improving the efficiency of the state. One would think. Or if he doesn't care about improving the state's efficiency – at least pretend you're interested. Fake it so you build up some support in the business community and among the jobless.

And yes this diary means the state will never seriously look at my company. If in return this can get the state to look at other local businesses for the first time – that's worth it. Because Governor Ritter, your blowing off local businesses costs this state jobs and costs this state money. And in the present economic climate those costs are severe.

It's time this state gave our small & medium businesses equitable treatment.

Should Chris King be fired?

I figured lets see what the blogosphere thinks.

Online Surveys & Market Research

The Performance Difference between the Public & Private Sector

Please go to my Windward Studios blog.

Isn't the web supposed to be more efficient?

It took me 45 minutes to make a reservation for 2 tickets & hotel to D.C. 45 minutes!

1. Expedia apparently has technical issues. Which I discovered after creating the entire reservation and tried to complete it. Tried 3 times in case it was a temporary problem.
2. So I called Expedia where the person told me yes, they are "having problems." Tried to make reservations with her, but it was impossible to get locations of hotels from here - especially how close they are to Metro stops. So gave up...
3. So then went to Travelocity and after working my way through and selecting a hotel I find out... that they don't list Frontier flights. So all flights they list are with stop-overs and are 6+ hours from start to finish.
4. But I can get a hotel from them - except the hotel prices all change when not with a flight. So had to work through that again.
5. Then I go to the Frontier Airlines website, get part way through, and it then tells me I must enter the age of each passenger - but provides no place to do that.
6. So I call Frontier where the person on the phone said that yes, they have had this error for months. And I then made the reservation over the phone.

Which leads to two questions:

1. Why do Expedia & Frontier bother to have a website?
2. Why does Travelocity not sell the one airline with direct flights from Denver to Washington National (Reagan) Airport?

Guys, being on the we doesn't mean squat. You have to make effective use of it.

BVSD - continuing to screw the students

from the Boulder Daily Camera

Saturday night at Fairview High School, an era will end.

More than 400 former students are expected to turn out to sing in a farewell concert for retiring Fairview choir teachers Ron Revier and Jim Keller.

These guys are phenominal teachers who have inspired a lot of students. And of course, the BVSD administration can't have that...

Keller, Revier and Fairview's long-time jazz band instructor Steve Christopher are among about 100 technically retired Boulder Valley teachers who have continued working on a part-time basis but will be forced to leave after this year.

"On the first day of school, the district said, 'If you're retired and working part-time, this is your last year,' " Keller said.

But hey, it's not like forcing out quality teachers matters...

Bell, who graduated from Fairview in 1984, said Keller and Revier literally changed her life. She said she came to the school as part of a bad crowd and found a strong community that inspired her life profession. She went on to the conservatory of music at the University of Missouri and now is a professional singer.

Bennet & Udall do good, the Senate not so much...

from the N.Y. Times

Despite complaints that banks and credit card companies are gouging customers by charging outrageous interest rates, the Senate on Wednesday easily turned back an effort to cap interest rates at 15 percent.

The effort by Senator Bernie Sanders, the Vermont independent, drew only 33 votes and needed 60, with a bipartisan group of 60 senators opposing it as the Senate pushed its credit card overhaul toward the finish line.

Bennet & Udall both voted for this. Kudos to them. But a boatload of Senators decided that usury ain't so bad...

But Mr. Sanders said the card companies and banks were engaged in conduct that could get others hauled into court. He said one-third of all credit card holders are paying interest above 20 percent and as high as 41 percent.

"When banks are charging 30 percent interest rates, they are not making credit available," said Mr. Sanders, who noted credit unions are limited to 15 percent. "They are engaged in loan-sharking."

My big worry is not any specific vote as they bring up this legislation. This particular one will hurt many individuals, but is not as bad for the economy as a whole as the killing of the cram-down legislation was. But any one of these can occur in the give and take of legislative vote wrangling. That's life.

What is worrisome is that when we come to the votes, time after time, we're leaving the financial industry to continue as before. We get great speeches about changing how they operate, but where it matters, in the legislation, no change.

And that means we are looking at a much longer time to recover and, when we do, more big crashes.

As Japan demonstrated with their lost decade, the self-interest of the financial institutions actually hurts the economy, including those same financial institutions. But like an alcoholic, they cannot see that they are harming themselves.

And they appear to have bought enough Senators that they can continue their binge...

My breakfast with Greg

I met with Greg Lopez, head of the Colorado Small Business Administration office this morning. Greg is the epitome of what you want in a government employee. He is knowledgeable, persuasive, focused, and incredibly enthusiastic. He also appears to know everyone in the main business community as well as our political leaders – which is key for his job. All in all, a great hire.

The most interesting thing was how the SBA operates. They not only are advocating and helping small businesses, but they themselves run much like a small business. They have a small number of people and a limited budget, yet they have a large number of efforts they must effectively complete. The government appears to be following the Microsoft model here where, when a job absolutely requires 5 people, assign 4 to it. I'm not saying that everyone at the SBA is working at 101%, but I think limited resources is a major constraint on what they can get accomplished.

Ok, so they're like us (small businesses) in many ways. Except… They can't advertise. They cannot spend a single cent telling people that they exist and how they can help them. So here's this great resource for small businesses. We spend all this tax money on it. Small businesses desperately need it. And they can't get the word out! This is nuts.

So back to Greg. Very interesting guy. He has owned companies, sat on numerous boards, was head of the Hispanic Chamber of Commerce, and mayor of Parker. A really varied experience that fits really well with his present job. What was also interesting was he talked very little about his previous experience, definitely not someone who needs to brag.

The main part of his job is getting out and talking to business leaders, political leaders, etc. The topic he kept returning to time after time was getting all of these people to realize how key small business is to the economy and how their efforts to purchase from small businesses assist the economy. And he would drill in on what they need to do to actually insure they are buying from small businesses rather than just going through the motions.

He also discussed how the banks are not loaning to small businesses here. He talks to bank executives who swear that they are loaning – and he brings up the SBA loan numbers to show that no, it's at about ½ where it used to be. And he gets in their face about it. He can only push so much but at least we have someone calling these guys on their B.S. when they claim that they are loaning money.

We discussed the definition of a small business and he said that while a manufacturing company of slightly under 500 employees appears large to a 5 person company, it is still very small compared to the large concerns out there. But he then went on to say that size generally is not an issue at all and they are happy to help any company. And they have very large companies coming to them for help – on how they should implement their small business programs.

I've never been a big proponent of set-asides, even though they would help my business. But he made a compelling case for it. First off, he discussed how small businesses are the engine that drives the economy, they provide half the jobs in this country, and they tend to be better paying jobs. Because of that, it is in our general interest to encourage the success of small businesses as it improves the economy. (He also believes that if small businesses can drive the turn-around, we will get out of this economic mess a lot sooner.)

He then discussed the self-interest of a community to keep its public spending local where possible so the money gets a multiplier effect. When a city builds a new police station, everyone local who is paid for that work then turns around and spends a lot of that money locally, so the tax money that is paying for the building also boosts the economy. All things being equal, I can see the value of that.

He returned time and again to effective measurable efforts to assist small business. He is clearly focused on making a difference. What was interesting is he would like to see the federal government do this better – and state and local governments actually do it. He was very polite and did not bad mouth anyone, but he clearly doesn't see the state or local governments coming even close to the efforts the federal government makes. (And I can attest to that difference from personal experience – it's major.)

He did have nice things to say about Governor Ritter's recent efforts to have them do a small business road trip together where they talked to small businesses and sat down with them one on one to help them with their present efforts. Greg has a superb grasp of what small businesses need to watch, what they need to do, what can get in their way, etc. If he was not in a government position (where he can't do it) I would beg him to sit on the advisory board of my company.

All in all I'd say the SBA is operating well here and is in very competent hands. Yes they'd like more resources so they can accomplish more (wouldn't we all), but they are accomplishing a lot with what they have. And they provide a wealth of key information for small businesses – information that can easily make the difference between success and failure. And the best measure of Greg is at the end of 1 hour I realized I had mostly learned about and been sold on the SBA, not Greg Lopez.

In closing, I asked Greg what was the one piece of advice he would like to give all people starting a small business was. And his reply was that the SBA is here to be your partner on your road to success. Call them.

My Email Exchange with Crystal

I asked all the council members if I could interview them. Crystal declined the interview but did send me a long email response below. I give her kudos for responding at all after the posts I have written about her – very gracious on her part.

From: Gray, Crystal [mailto:[email protected]]

Sent: Wednesday, April 29, 2009 8:54 AM

To: David Thielen

Subject: RE: Interview request (free lunch)

 

Dave: I will pass on the offer for lunch but send me any questions and I will be happy to reply.

The budget process has evolved during the time I have been on council

(2003) when a few of us characterized the process as a 'black box' - council was presented with a budget by the manager with little room to make changes. The city charter establishes the managers responsibility to prepare the budget and present it to council within a certain time frame but it does not prescribe the process for the manager to accomplish this. To Manager Frank Bruno's credit (listening to the 'black box' comments) he developed a budget process that included frequent check in with council on the policy direction, and priorities, that should be reflected in the budget. This took place during the 2004 budget when we cut $18 million. Manager Jane Brautigam has added pubic input into this process. Public meetings for the manager to gather input, before she develops her budget, are scheduled for May 11, 6:30 pm at Fairview and May 21, 6:30 pm at the West Senior Center.

The manager has already presented Council, and the community, with her Stabilization Strategies that address revenue reductions and the resulting expenditure reductions. You can access this on the city home page under Announcements, Budget information.

http://bouldercolorado.gov/index.php?option=com_content&task=view&id=10852&Itemid=3627

I support many of the strategies she has proposed and feel that some are long over due.

In addition to this process the manager invited council to participate in a session with David Osborne who wrote a number of books dealing with reinventing government and budgeting for results. I am sure you will see more of this approach reflected in Boulder's budgeting. I also support programatic budgeting so the public, and elected officials, can actually track budgets by specific programs and tie them into goals, accomplishments and measures.

As for the other major tasks ahead - the council sets goals at the beginning of the year and those are merged with the staff work program.

We have a full work program ahead (this is listed in detail in the back of our meeting packets that are available on line), in addition to the four council goal areas, that includes defining the direction of the Climate Action Plan, completing a number of planning issues, and reviewing master plans that are in process.

Council has also decided to dedicate time to work on projects with the community to highlight the good work that goes on in the community and to build partnerships with the community. This involves no staff time and we completed our first project by working last Saturday at the Marine Street EFFA site improving their playground and doing yard work.

The manager also volunteered and shoveled many loads of gravel to make the play ground safer.

Hope this helps.

Crystal Gray

My Coffee with Angelique

I asked all of the Boulder City Council members if I could interview them and Angelique Espinoza was gracious enough to accept (1½ others have also accepted). Angelique is my favorite council member, not because I agree with her (I disagree with her on a number of things) but because she is both very nice and a nerd. Talking with her is always a pleasure.

So we first discussed her not running for re-election. She's going to miss the council – a lot. Angelique said this was by far the most interesting, fascinating, rewarding job she has ever held. She likes the work. She likes the difference she can make. She thinks she brings a valuable voice to the Council as the only member with young children. And while she didn't say it, she's it for racial diversity on our Council.

So why not continue? Because she can't afford it. The council pay is virtually nothing for what is in practice a full-time job. I think if you look at the hourly rate they end up receiving it's well below minimum wage. As she says, in this economy her family can't take the risk of having a single working parent because layoffs happen and it can take time to find a new job. Crappy pay does limit who sits on the City Council.

We then went in to the upcoming budget cuts and Angelique brought up the key point. Even without the depression the City was facing a major financial issue – the rate of inflation for the city's expenses is 4%/year while tax revenue has been increasing at 3%/year. The depression has accelerated the impact of this difference, but the core issue would exist regardless. The bottom line is that the City is going to have to look at everything it does and decide what of that it should be doing (and at what level) and what it should stop.

Well not everything. I asked about Police & Fire and she says that those need all of the funding they presently receive although they will both look for any possible efficiencies. It blows me away that the majority of the City's budget is viewed as untouchable. First, this means a 1% shortfall will require a 2% – 3% cut across the remaining programs. Second, when an operation is told that it does not face any cuts, then it has no incentive to find new more efficient ways to perform its services.

Ok, so diving into the cuts. A lot of time this is Kabuki Theater where we all know what we will end up doing but we have to go through the motions of getting citizen input, commission reviews, staff input, etc to then implement what the Council had in mind at the start. Apparently not this time. Angelique's comment was that she may just not see it because she has only been doing this for a couple of years, but she does not see any consensus at all. This may be due to the fact that some very very hard decisions need to be made and it's not clear how those decisions will play out. But it does look like there is no done deal here and the citizen input will shape this decision.

She then brought up the library system and said that because they were proactive and were first (and so far the only) to come up with the various alternatives based on funding levels, everyone assumed that they were going to see large cuts. Angelique was very adamant that all that has happened is the library did their review first, and did a good job. But they are not specifically on the chopping block.

We then got into a long discussion about the future evolution of libraries due to items like the Kindle. This was a fascinating discussion about what libraries bring to the community today, which is much more than books. And what factor books will be in the future when any book is instantly available on a wireless device – but children will still want to come in for reading events. Having someone on Council with Angelique's tech background and her understanding of the many ways a library helps make our community a community is very valuable. (Here's hoping someone else with these skills takes a vow of poverty and runs in the upcoming election.)

We then discussed the conundrum for Boulder where it can grow out, it can grow up, or it can grow richer. Angelique understands that this is a real trade-off and that mouthing platitudes toward affordable home prices while restricting growth in either direction means we will unquestionably become a place where only the wealthy and the subsidized can afford to live. She unequivocally supports greater density and the taller buildings that that requires, both to make Boulder more affordable and to improve the economics of mass transit.

Angelique also thinks we are headed for constantly increasing oil prices and the end of the automobile for mass transit. I disagree but hey, anything that can be done to make mass transit more economical is generally a good thing so the specifics she wants to accomplish make sense even if the car remains in use.

She also discussed how the increased cost of living in Boulder was leading to a clear racial divide and reduced diversity. (I personally have always found Boulder to be incredibly white.) She brings up the very valid point that we are losing the middle class which is the most diverse stratum in society. We will have mostly Hispanics in the subsidized housing and mostly whites in the rest – and we then have skin color marking economic level with a large divide between the two. Not a good situation. And we are headed for this, but I wonder if anyone else on Council ever thinks of this – you tend not to when you're on the winning side of the line.

Angelique leaving the Council is a loss for Boulder. She's an intelligent, thoughtful, curious, open-minded individual. And she is willing to face the trade-offs the city faces and propose real solutions as opposed to pushing those decisions off – which means we make the default decision. She is also very respectful of the democratic process talking several times about how the Council needs to respect the will of the electorate even if they don't agree with it. And to repeat, she's a really nice person.

Calling Failure a Success

In today's Daily Camera we have Boulder Valley third-grade CSAP scores steady which is quite a spin for the situation on the ground. "Hold steady" is another phrase for no improvement. And how long have we had no improvement? From the year we first started measuring schools – 12 years ago. No improvement (details here).

Now if you're doing a phenomenal job then "hold steady" is a great result. But when your results are in the toilet, continuing to hold steady in the shitter is not something to be proud of. And BVSD is in the shitter. For the last 12 years 30% of our children are not proficient. And proficient is a relatively easy score to reach if a student is doing well in class.

And the ramifications for those in that 30%? Almost without exception it means they are not prepared for college and with no college, in the modern economy, they face very limited options in the job market. In other words, they're hosed financially for the rest of their life and their children are also looking at a life of economic hardship. Yes there are some jobs that pay well and don't require a college degree – but not very many.

Finally to those that say the tests don't measure the right thing and that teachers teach to the test. First, no test is perfect but don't make perfect the enemy of good. The trick is to improve the tests so that teaching to the test does teach what we want children to learn. And second, if our schools are teaching to the test then we can agree that BVSD's teachers are failing – because 30% of their students are failing the test they spend their time teaching to.

Yes we could come up with better measurements (although there is massive teacher resistance to that because better testing will clearly identify which teachers are doing a poor job). Yes there are numerous home and societal issues that significantly impact how well kids do. But to effect zero improvement over 12 years…