Monday, January 21, 2013

What You May Not Know: Week Of January 21

Ten committees, boards and commissions meet this week, headlined by Monday's 6 pm Human Resources Committee meeting.

After months of consideration and holding the matter at back-to-back meetings, it's likely the HR Committee will finally reach a recommendation on the non-union Compensation and Classification plan from Carlson Consulting. The matter has been held to this point largely because of some unanswered questions about the numbers in Carlson's report and some questions about the math used to reach the final result.

Unfortunately, after attending two committee meetings to discuss this project, Carlson has decided they've met their contractual obligations and will not be attending tonight's meeting to further explain any of their findings. As such, this committee and the council will have to decide to either accept or reject this plan as it is, without any further explanation.

When it comes to an issue as important as employee compensation, I feel like this committee and the council have every right to expect and even demand confirmation that every possible step was taken to ensure that these numbers are accurate and the methodology used to reach them is sound. Given that it doesn't appear likely that they'll receive that assurance, if I had a vote on this committee I'd vote to reject this plan.

Other highlights from this week:

Human Resources, Monday, 6 PM

In addition to the issue above, the HR committee will also discuss (again) the possibility of a 0% raise in aldermanic salaries for 2014 and a resolution making Martin Luther King Day a paid holiday for city employees.

Utilities, Tuesday, 6 PM

The Appleton Water Utility is installing new "smart meters" around the city that use radio frequency transmitters, and the city is recommending that users not be allowed to opt out of having a "smart meter" and radio transmitter installed. The committee will discuss this matter on Tuesday.

Finance, Wednesday, 5 PM

One of three information items on the committee's agenda is a resolution proposed by Aldermen Croatt and Clemons to review the property taxpayers' interest rate on financing of special assessment projects. This interest rate for five-year financing was reduced from 9% to 6% back in 2012. Croatt and Clemons propose tying the rate to "a key measured financial interest rate."

In my opinion tying the interest rate to something to allow it to rise and fall along with other interest rates is the right decision, but I'm concerned by the resolution's language identifying these loans as "unsecured." That will likely lead to these rates being compared to some very high interest loans.

One of the stated goals of this process is for the city to "not compete with private-sector financial institutions" and that's a noble goal, but on the other side there's a problem with setting these rates too high. The city's financing will primarily be used by people with no other options. We're talking about people with fixed incomes, people who are already facing significant debt or people whose houses aren't worth as much as they used to be. These people are going to have a hard time finding a financial institution willing to give them money to pay for these street projects, so many of them will be forced to accept a higher interest rate from the city. These people are in enough trouble without the city dealing them another blow.

Keeping you informed on issues that may impact you around the city is one of my primary goals as a candidate for and a potential member of Appleton's City Council. There's a lot going on and a lot of information out there, but I'm happy to do everything I can to make these decisions and the discussions around them as accessible as possible to as many people as are interested. 


  1. I think too much is being made of the rate issue. The city should not try to be competitive as it should be up to the taxpayer to get their own financing. It costs the city more from an administrative standpoint and it increases the risk of default by having more open obligations. They are not secured as the city has no promissory obligation to your property. The majority of these projects are in new neighborhoods (like #13) where the property holders have full knowledge that sidewalks and eventually new streets will be coming. The city must run like an efficient and prudent business, not a charity.

  2. Thanks for the comment, Donna. I understand your concerns but here's why I disagree with your conclusion:

    - While it's true that these projects largely happen in newer neighborhoods, it's also true that a lot can happen between when you buy a house and a project like this. Something as simple as job loss, a loss in home value (which is probably pretty widespread in newer neighborhoods built before the market declined) or an unpredicted event like a major illness could all put people in a situation financially where they're going to have a hard time getting credit.

    I'm not suggesting the city should make these rates so low that they're everyone's best option. I would like, though, for the city not to set the rate so high as to cause undue hardship on the people who have to rely on them. The people who need these loans likely already have enough to worry about.

    - This year the city is able to borrow money at a 1.1% interest rate, and will charge 6% interest on financing for special assessments. This certainly is not a case of the city "running like a charity." The city is coming away with a pretty solid rate of return on their investment here.