Oh How Things Can Change In One Year

My Friday column in the NDN:

As I mentioned to you last week, your city council is now reviewing the 2011-2012 operating budget in preparation of final approval sometime in September. This past Tuesday, the council and city directors had our first chance to have open discussions regarding a majority of the budget plans for next year. I’m very pleased to say that things are looking far better than they did just 12 months ago.

Most notable to me is the first planned pay raise for our employees since 2008. The planned 3.5% cost-of-living increase for 2012 is in contrast to a 0% increase last year and a 3.75% DECREASE in 2009. We’ve got a great group of folks who work both in the public eye as well as behind the scenes to keep our city functioning. They are very deserving of this increase.

Other notable highlights include the planned addition of two more police officers to our force in October. Combine that with the two officers added last month and we’re making some good headway to restore a force that saw almost half of its headcount cut just one year ago. Our fire department should also see the final two firefighters return to the city’s payroll in 2012. Thanks to the 24-month SAFER grant, the fire department is now back to full force.

One last note of good news is that overall sales tax revenues for the city continue to show some positive, albeit slight, increases from this time last year. While the overall impact will be small, it’s a welcomed sign that things are slowly improving and the local economy is doing better.

As with any budget, there are some challenges on the horizon. Golf course revenues are lagging behind where they need to be. Options are still being explored to help that cash drain to the city, but there will be no quick or easy fix. We also have to plan for the end of the SAFER grant funding in May, 2013. That grant allowed us to restore our fire station staffing, but the city will once again be responsible to start paying those salaries 18 months from now. We’ve got time to plan, but the $300K+ annual cost is a sizeable amount that will require some hard work to cover. Capital needs for fire truck and police car repairs/replacements are also on the list for 2013. Our crews have done a great job keeping our equipment working longer than its expected lifespan, but even the best kept equipment will have to be replaced at some point.

Overall, it was a good session and a positive change. Your city staff has worked hard to keep costs low and expenses under control. We’ve got a long road ahead, but the financial disaster of 2009 is now in our rearview mirror and I’ve very pleased to tell you that we are heading in the right direction once again!

Until next time, have a great week. Best of luck to our football boys tonight against Bolivar in their home opener. GO WILDCATS!

Joplin Sports Authority Notes Positive Economic Impact

The Joplin Sports Authority released their 3rd quarter results and they were impressive.  Economic impact for Joplin was posted at $504,675 for the quarter with 5,536 visitors coming into Joplin for events.  Major events included baseball and softball tournaments as well as a tumbling and trampoline competition.

For the year, the JSA shows an overall economic impact of $1,073,944 to the area.  Given JSA’s spending of $200,155 during the same period, they show an ROI of 4.4 (or 436.6%) on their investment.

The full report showing the positive impact of their sporting events can be found here.

Small, Locally-Owned Businesses Better for Economic Development

From www.dailyyonder.com

Researchers at Penn State University have found that smaller, locally-owned businesses are better for growing incomes in a county than the presence of larger companies or big box stores owned outside the county.

Counties with more small, locally-owned businesses have faster growing incomes than those places with big box stores and large firms owned by those outside the community. Here is a picture of the main street in Red Lodge, Montana.

It does matter whether a business is locally owned.

Researchers at Pennsylvania State University have found that counties with more small, locally owned businesses have stronger economic growth than communities with larger businesses owned by outsiders. "Local ownership matters in important ways," said economist Stephan Goetz who was co-author of the study with David Fleming, a Penn State graduate student. "Smaller, locally owned businesses, it turns out, provide higher, long-term economic growth."

Larger firms owned by people outside a county depress growth, the researchers found.

Goetz and Fleming looked to see if per capita income growth in counties was affected by the size and ownership of local businesses. The two studied U.S. counties during the period from 2000 to 2007.

The effect of having locally-owned, small firms (with between 10 and 99 employees) on a county's economy was significant. There was a strong, positive relationship between the presence of smaller, locally-owned firms and faster growth in incomes.

The presence of larger firms owned by those outside the county had the opposite impact. Those counties had slower growth in incomes. Goetz and Fleming found that this impact extended to big box retail stores, such as Walmart and Home Depot.

"Although these types of (larger, non-local) firms may offer opportunities for jobs, as well as job growth over time, they do so at the cost of reduced local economic growth, as measured by income," Goetz and Fleming wrote. "Small-sized firms owned by residents are optimal if the policy objective is to maximize income growth rates."

One of the reasons locally owned firms are better for county economies than big box stores and larger, out-of-town corporations is that these larger firms outsource many services that the smaller companies buy within the community, Goetz explained. They use local accountants and wholesalers while big firms do this work themselves.

Small businesses and local start-ups not only buy locally, but they tend to spur innovation and productivity within the county.

"This is really a story about start-ups," said Goetz. "Many communities try to bring in outside firms and large factories, but the lesson is that while there may be short-term employment gains with recruiting larger businesses, they don't trigger long-term economic growth like start-ups do."

Goetz said his findings might provide a better strategy for local economic development officials. Encouraging local businesses would be better for growth than recruiting larger firms from outside the county.

"We can't look outside of the community for our economic salvation." Goetz said. "The best strategy is to help people start new businesses and firms locally and help them grow and be successful."

Goetz is the director of the Northeast Regional Center for Rural Development. The Goetz and Fleming research appears in the Economic Development Quarterly.

Pay Study Shows Sum Increases Planned for 2012

As the city considers the new budget and giving employees their first raise (vs. cuts) in 2 years, I thought this article was timely.

From the AP:

NEW YORK (AP) -- A new survey says salaried U.S. workers can expect another year of modest raises in 2012.

After increasing salaries by 2.6 percent this year and last year, companies are planning a 2.8 percent bump in 2012, benefits and human resources consultancy Towers Watson reported Monday.

That's somewhat smaller than raises in the last decade. From 2000 to 2006, the year before the Great Recession began, salaries rose an average 3.9 percent for workers who were not executives.

And the modest bump may not help add much buying power for shoppers. In the 12 months through July, prices for consumers have risen 3.6 percent, according to the government's latest calculations.

Salary increases have been small, even though many companies are sitting on huge cash stockpiles. They're being conservative with permanent salary hikes because of uncertainty about the economy and memories of the deep cuts during the recession, said Laura Sejen of Towers Watson.

Because of worries about the economy, companies are trying to avoid "fixed costs," such as permanent payroll increases, Sejen said. Hiring has also been tepid this year. More than 9 percent of the country's workers, or 13.9 million people, are unemployed.

Instead, companies "are trying to pure more emphasis on the variable components of compensation," she said. That means bonuses, which make up a far bigger chunk of total pay for executives than for other salaried workers -- 41 percent this year, versus 10 percent.

Salaries for executives are also expected to rise 2.8 percent next year, the survey said.

The human resources company conducted the survey in June and July, polling 773 U.S. companies.

My Softball Girls for 2011

I’d forgot to post a picture of my 2011 Marco Softball girls team.  We had a great year.  Proud of all of them!

August Sales Tax Up – Joplin Tornado Likely Cause

The 1% sales tax deposits received this week from the state were up 19.25% over the same time last year.  Monthly receipts were $151,415.55 (vs. 126,970.44 in 2010.)  The major increase is likely due in part to the May tornado in Joplin as retail sales were pushed to outlying areas not impacted by the storm.

For the year, the 1% sales tax is 3.28% ahead of last year at $1,871,794.74.

One month remains for sales tax collections in this fiscal year which ends Sept. 30.

Not In Our Town!

Saturday morning’s arson fire at the Neosho city pool has raised the stakes of taking action against the criminals who are causing havoc in our town. The city is committed to find and prosecute those responsible to the fullest extent of the law. For me, I’m doing my part by adding a $1000 to the reward pool for information that leads to the arrest and conviction of the coward or cowards who did this.

As an elected official, I’ve grown accustomed to reading about the occasional break-in here and some vandalism there, but to set fire to a public building that serves all of Neosho was a cowardly act. And this fire doesn’t just shut down a pool for a few days. It impacts everyone in our town in one way or another. Whether it’s the kids looking for a few more days of summer fun before school, the lifeguards seeking a few more weeks of pay for their summer job, or the individual tax payer who will now have their taxes spent to repair a building needlessly damaged…we are all impacted.

But for many, it goes beyond that. It begins to cross an invisible line of tolerance and invades the space that we call “home”. As someone who was born in Neosho, I’m very angry about the events of Saturday morning. But I take solace in that our Neosho PD will find those responsible. I call on everyone in this town who has seen enough of the crime and vandalism in our parks and across our city to stand together and say “no more”. Whether it’s a dime or a dollar or a strong word of encouragement, please contribute to the efforts to find these cowards and bring them to justice. Take and stand and send a message – “NOT IN OUR TOWN!”