Saving Money Wherever We Can...

We’re still not exactly sure how all the national health care changes will shake out at the local level but we’re figuring that the cost pressures are not likely to magically disappear anytime soon so we’re still out there scouting for ways to save dollars wherever we can.  The City is self insured and as we’ve made strides over the last couple of years to put more emphasis on wellness and staying healthy we’ve seen our costs proportionally decline but all it takes is one or two serious medical problems in a year to wipe out those incremental savings. 

When you drill down into the numbers it turns out that one of the City’s largest cost components is pharmaceuticals.   Anyone that’s filled a prescription recently knows that drugs are expensive, and while that’s not a surprise, it’s a tough nut to crack.  We’ve had some good success converting routine prescriptions to the mail-order approach and not only has that saved money it is also very convenient — so it’s a win, win. 

Although it’s a pricey market, the prescription drug market is also fairly competitive and we’ve tried to leverage that into deeper discounts.  In June, the City’s Human Resource Manager reported that she completed another round of price negotiations with our pharmacy provider and we actually came out ahead.  Under the new pricing and formulary reimbursements the City should save approximately $70,000 in pharmacy costs over the next 12 months.  The Health Plan coverage remains the same but the prices for the drugs have been reduced. 

Finally, some good news on the health front. 

City of Kent CDBG 5 Year Plan...

Some of my best friends in city government have been planners, but despite that, I’ve always felt that as a group city planners were a hazard to themselves.  Not because they’re bad people but because they’ve built a world of acronyms that only they can understand so the average Joe and Jane can’t relate — and more importantly appreciate — all the good things that the planners do.  Try sitting through most planning meetings and tell me I’m wrong.  Not likely. 

Which is too bad because city planners do a lot of great work that is very meaningful in our community but they’re cursed with aconymitus.  The truth is it’s not really their fault — they’re just using the language of the state and federal agencies that send money their way.  Who’s going to argue with the hand that feeds you so the fed-speak gets passed from generation to generation until only those inside can understand it.  For most of us it’s like Latin, we can see the relevance but we can’t speak it. 

The good news is that the City has a great translator in Bridget Susel.  She can drop acronym-bombs with the best of them but she is also well versed in language of non-planners and she is one of the best planners that I’ve had a chance to work with when it comes to interpreting fed-speak into what we speak.  She’s just completed the 5 Year Plan update for the City’s CDBG programs (that’s Community Development Block Grant for you and me) and she and I thought we’d share a few pieces of it for those that have wondered what all that CDBG stuff was about. 

The City of Kent doesn’t actually get a lot of Federal CDBG funds — around $325,000 a year — so it doesn’t go that far, but Bridget works hard to make sure whatever we get has a real impact in the areas of low income housing assistance which is the heart and soul of CDBG. 

For the true adventurer’s you can download the full document here:  2010-2014 CDBG Strategic Plan

But for novice, I’d recommend a quick read of the executive summary (below):

City Online Auction Comes Up Big...

A few weeks ago I did a blog post announcing our first foray into the wonderful world of internet auctions.  I am pleased to report that when Gene Roberts, City Public Service Director closed the bidding Tuesday afternoon the sales were almost 5 times greater than any of our previous local auctions (for roughly the same general inventory of surplus). Specifically Gene reports that the total sales prices for all of the items sold online amounted to $54,744 in new revenues to the City. By comparison, the average total revenues for 2008 and 2009 was $9,583. 

Clearly the internet based exposure and the popularity of comparable online auction services like eBay helped us get a lot more interest which ended up pushing our prices and revenues higher than ever before.

Gene said that we learned a few things about the online auction process which should help us be even more online customer friendly in future years. Going online required some extra staff work (to inventory, photograph and upload information on the items) but it appears to have been well worth the effort.

Gene and his staff deserve a lot of credit for taking the initiative to give this a try and making it such a success.  Great job.  

It’s got everyone thinking, what else can we sell?   

Get Your City Surplus Here...

Given the popularity of eBay and other web based sales sites, the City decided to test those waters and for the first time rather than holding an old fashioned live auction for the sale of surplus City property, interested buyers can preview and bid on items on line from the convenience of their own home using their computer.

I’m guessing the auctioneer might not be happy but we think everyone else will be with this easy to use and convenient internet auction.  We’ve got 82 different items ranging from heavy equipment vehicles to lawn mowers and tractors. 

It’s not all big outdoor stuff, you can also find typewriters, printers and desks.  See for yourself, here’s the link to the online site:    http://asset-auctions.assetnation.com/index.cfm/general/AuctionDetail/AuctionID/342

Obviously we’re hoping that the online interest will push up the value of the surplus items that we’re selling.  We’re not going to solve our budget troubles with the auction but every penny counts these days so why not try to get as much as we can. 

A Little Demo Work Goes a Long Way...

Housecleaning — sometimes literally sweeping a blighted house away — can have a very positive impact in a neighborhood and that’s why big cities have added a new line item to their budgets:  Demolition.  Youngstown made national news with their strategy of growing as a city by getting smaller, and now others like Detroit and our northshore cousins in Cleveland are all touting the merits of clearing out troubled buildings to make way for new ones. 

Even here in Kent we’ve been applying for grant funds for the purpose of removing blighted properties and I think we’ve taken down 3 or 4 so far (not counting all the demo for the new Fairchild Avenue bridge).  The properties that the City has removed have all been vacant and longtime eyesores that neighbors have begged the City for some visual relief.  And honestly it’s more than just visual improvements – deteriorated properties can pull everyone’s property values down and make it hard for re-sale which quickly leads to a cycle of decline that all too often ends in foreclosure. 

With that in mind the City looks at selective demolition as an intervention strategy to help neighborhoods stay out in front of the cycle of decline.  All of the properties that have been brought down have been chronic violators of City Codes and a sore point for all the neighbors who have pushed hard on the City to take some action.  Unfortunately, actions can be slow when it comes to navigating the court system to present a compelling enough case for a judge to say enough is enough and authorize the City to proceed with demolition. 

The most recent example of exactly that process is the old Sales Cleaner property at the corner of Elm and Franklin.  That property is being demolished this week — here’s a photo and a note from the City’s Public Service folks recommending traffic detours during the demo activity.

NEWS RELEASE
May 4, 2010

 West Elm Street
BOTH EAST & WEST BOUND

BETWEEN FRANKLIN AVENUE AND WALNUT STREET AND PARKING ON THE STREET WILL BE PROHIBITED 

AS PART OF THE CONTINUED DEMOLITION WORK, WEST ELM STREET (BETWEEN FRANKLIN AND WALNUT) WILL BE CLOSED TO THROUGH TRAFFIC BETWEEN THE HOURS OF 7:00AM AND 5:00PM ON THURSDAY AND FRIDAY MAY 6^TH & MAY 7^TH, 2010. (LOCAL ACCESS TO WEST ELM W

WILL BE MAINTAINED VIA WALNUT STREET)

NO ON STREET PARKING WILL BE PERMITTED ON WEST ELM STREET BETWEEN FRANKLIN AND WALNUT FROM 6:00AM TO 5:00PM ON THURSDAY & FRIDAY MAY 6^TH & 7^TH, 2010.

ROAD CLOSED SIGNS WILL BE POSTED.

MOTORISTS ARE ASKED TO AVOID THE AREA AND TO PROVIDE ADDITIONAL TRAVEL TIME WHEN LEAVING FOR THEIR DESTINATION.

FOR FURTHER INFORMATION, RESIDENTS MAY CONTACT THE DEPARTMENT OF PUBLIC SERVICE AT (330) 678-8105.

City of Kent, Ohio
Eugene K. Roberts, P.E.
Director of Public Service
____________________

Next up… The old Triangle Cleaners Building will be coming down later this month on N. Mantua.

2009 Construction Value Summary...

The story has been told 100 times all over northeast Ohio so it is probably not a shock to anyone to hear that 2009 was a very slow year for residential construction activity in Kent.  You just have to drive around to see the lack of contractors on sites for new home construction – and the end of year numbers that just came in confirm the limited investment made in residential construction last year. 

The value of new residential construction in 2009 was 340% less than the 10 year average.  Yes, that would make it the record low for the last 10 years.

By comparison, the commercial value for 2009 was actually 10% above the 10 year average (thank you Mr. Burbick for Acorn Alley and the Phoenix Project). 

In total, the construction value of projects in 2009 was down but it was not atypical with some of the low cycles that investment has seen in the last 10 years.   

New construction investment is an important indicator of community prosperity so we pay attention to them.  Investment tends to beget more investment (downtown Kent is a great example of that) and likewise divestment tends to lead to more divestment (unfortunately the old Tops plaza is an example of that).   New investment, particularly commerical investment, really does have a halo effect — I don’t know if it’s peer pressure, market competition or human nature but regardless we’ve seen time and time again where an investment in one property seems to create a domino effect on properties all around it.  That’s the kind of momentum we’re working hard to create in the downtown in the hopes that its rising tide will lift the boats all over Kent.

Flat investment numbers are frustrating for the reasons noted above but city economics is such that our revenues are primarily from income taxes — we only get a small share of property taxes — so the lack of investment in new housing starts is less of a city financial issue (and the truth be told given our tax structure the city loses money on residential properties so you could almost argue that lack of housing construction is almost good for the city financially but that’s a discussion for another day) than it is a community prosperity issue. 

Here’s a look inside the numbers: 

By comparison here’s a look at the trends within Portage County:

Gas Well Drilling For Revenue...

Desparate financial times call for comparatively desparate measures and with a sense of urgency the City is exploring ways to supplement slipping revenues in traditional sectors with non-traditional sources — such as gas wells on City property.  About 18 months ago City Council asked staff to investigate the opportunities to create a new cash flow by working with local natural gas companies and 9 months later the City staff brought a proposal to install a well on City land adjacent to the Silver Oaks apartments. 

Now the staff has planned a meeting with the residents of Silver Oaks to answer questions and talk about the drilling project.   The Public Service Director, Gene Roberts has arranged for a meeting to be held on April 28th at 4:30 PM in the Community Meeting Room of Silver Oaks to discuss the gas well drilling planned for the adjacent City property. 

In preparation for the meeting Gene provided some short answers to the most common questions:  

What is the need to drill here?
The City had been approached by several gas well exploration companies to drill on City property.  This issue started after the State of Ohio Legislator changed the laws in the State of Ohio in 2004.  Prior to 2004 municipalities were able to regulate gas and oil wells within their respective corporation limits.  In 2004 the State law changed which allowed for drilling within municipalities without control of any kind by the local government.  The City investigated each request to drill on City property and selected C J Cutter as the firm that offered the City the best opportunity to realize the maximum revenue from the City property balanced against C J Cutter’s long standing reputation of being responsive to complaints and in general keeping an extremely clean drill site.  Gas wells are  regulated by the State of Ohio, Department of Natural Resources.  The location of Kent being east of the line represented basically as SR91 requires oil and gas wells to be drilled to a depth of 4,000 ft..  The regulation for a gas well 4,000 ft. deep requires a minimum of 500 ft. horizontal distance between the physical location of the well point and all aggregated properties.  The specific location of the well to be drilled this summer is placed so as to meet this requirement and a host of other requirements such as distance from public roadways and buildings.

What is the likely income from this project?
The income the City will experience for the first year includes a $10,000 spud fee, well head price for the first 300,000 Cu. Ft. of gas delivered by the well (first and every year) and approximately 1.5% of the net profits experienced from the sale of the gas from the well.  There is no exact estimate that can be given for a new well but in discussing the potential income that the City could experience the first year the City could experience upwards of $25,000 if the well is a good “producer”.  The City has no financial risk, as the well driller pays all costs associated with drilling and operating the well.  Just by way of example if the well generates $25,000 it equates to an approximate 3/4% increase in the rate that is charged for sanitary sewer, which is where the money would go because the City purchased the property for the purpose of building the new College Tower Lift Station with Sanitary Sewer funds in 1988.  Hopefully you can see the benefit that will be experienced by ever Kent utility customer by the City entering into this arrangement.  Currently the City is reviewing rate increases and in the event that this gas well produces as expected the first year the revenue generated from the well can be used to reduce the necessary future increases in the cost the City needs to charge to deliver sanitary sewer service.

Has there been an environmental impact study?
The regulation regarding the need for an environmental impact study, if needed, would be controlled by ODNR.

Have the residents of Silver Oaks been consulted?
I (Gene) met with Councilwoman Tracy Wallach and she advised that she had discussed this issue with several of the residents at Silver Oaks.  Additionally we are trying to set a meeting at  Silver Oaks in about two weeks at which time all Silver Oaks residence will be presented the details of the City use of public property for a gas well, will be available to answer questions that are directed at the City and C J Cutter (the well driller) will also be present. 

Water Plant Operations Report...

Last month the City’s Water Plant Manager, Steve Hardesty, provided City Council with a very informative and insightful presentation on the state of the operations at the City Water Plant.  In the course of an hour Steve walked through a long list of operational challenges that he and his staff have wrestled with and in each case they solved the problems and saved the City money.  Unfortunately they don’t control the cost of electricity and the chemicals that they use in the water purification process and that’s what’s putting a lot of pressure on City water rates.

The City is in the process of conducting a utility rate study to evaluate the City’s rates in order to come up with a rate stabilization plan that ensures the City has safe drinking water that is also affordable. 

Water Treatment Plant Computer Operations Screen

By their nature, utility systems rely on expensive treatment equipment that gets used 24/7, 365 days a year.  That’s a lot of wear and tear, and even with our aggressive maintenance programs we routinely face significant replacement and repair costs which are paid for out of the funds generated by the water rates. 

The costs for that equipment and the power to run it keeps climbing higher leaving the City staff fewer and fewer options or resources to respond with.  All of that is a long way of saying no one on City staff wants to raise rates but more than that no one wants to produce bad water — which means we (as a community) have got to determine what we are willing to pay to ensure our water quality remains excellent — and that’s the mission of the rate study. 

To help to begin to understand the dynamics of water plant operations I thought I’d share Steve’s powerpoint that he provided to City Council.  Unfortunately I don’t have a tape recorded version of Steve’s narrative because he did an excellent job at explaining complex, technical matters in plain english that everyone could understand.  However, Steve did provide his notes in the power point and while they are a bit cryptic you can read them by scrolling over the upper left corner of each slide. 

After Steve’s presentation I received a note from Councilman Ferrara that is a great testament to the quality of Steve’s work:  

Kent Companies Come Up Big in 3rd Frontier Awards...

The State of Ohio 3rd Frontier techonology awards were announced for this year and two of Kent’s favorite liquid crystal start-ups were recipients once again – Kent Displays and Alpha Micron will both receive $1 million.   That means out of $5.7 million provided statewide, Kent companies got 35% of the total State allocation.  That’s an impressive statement for high tech commercialization in Kent.  

These companies are two great examples of what the future holds in store for Kent’s economy.  With research born in Kent State’s liquid crystal institute labs these two companies have roots in Kent and they have chosen to stay and grow their businesses here.  When it comes to keeping these companies in Kent, the CEO’s of both companies have emphasized the importance of re-energizing the downtown and making Kent a more vibrant place for the employees and their families that they are bringing into Kent from all over the world — which explains the sense of urgency we have to keep the downtown project rolling forward. 

Here’s an excerpt from the news article in Crains that referenced the Kent 3rd Frontier Awards: 

Among the businesses receiving advanced material awards was Kent Displays Inc. of Kent, which got $1 million. Kevin Oswald, the company’s communications director, said the funding will be used for the development of flexible liquid crystals.

A consumer application includes creating an electronic skin that would permanently be integrated to the surface of, say, a cell phone, allowing the user to change the phone’s color by pressing a button.

“If I am wearing an orange shirt today and wanted to change my phone orange, I could do that,” he said. “If I change my shirt tomorrow to red, I could change my phone to red. It allows dynamic appearance change of an object.”

Oswald said the company previously received about $12 million in Third Frontier funding. He said the money helped to take the company from about 40 employees two years ago to about 70 today. The funding also helped to launch the Boogie Board, an electronic writing tablet that uses unique liquid crystal display technology and needs virtually no power to operate.

Other companies receiving advance material program awards included:

– AlphaMirror Inc. of Kent, in collaboration with AlphaMicron, Elbit Systems and Magna Mirrors, $1 million to manufacture an affordable and environmentally friendly plastic film, auto dimming rear view mirror.

Counting Down To The Grand Opening of 5 Guys Burge...

It’s been a moving target but it appears that the owners of the soon to be opened 5 Guys Burgers and Fries in Kent will officially be opening their doors in April.  5 Guys fanatics are rejoicing everywhere. 

I say fanatics because that’s the kind of following this restaurant chain has enjoyed.  It is one of the fastest growing franchises in the country and it’s funny because I can remember when the first 5 Guys restaurant opened in the Washington DC area and I had moved there after graduating from college.  It wasn’t fancy but it sure was popular.  So I expect great things for the Kent store. 

It turns out that the 5 Guys media man is a Kent State grad (2001) and here’s his press release announcing the opening of the Kent store.

March 24, 2010

 Five Guys Burgers and Fries Kent to Open in April

KENT, OH – Wed, March 24 – Five Guys Burgers and Fries will open its newest store in Kent in early April, in the highly popular E Main Street corridor.

The menu at Five Guys Burgers and Fries is simple: burgers, hotdogs, fries, grilled veggie and grilled cheese sandwiches and beverages. The select menu is a reflection of Five Guys’ philosophy of focusing on a few items, and serving them to the best of their ability. The décor is purposely simple so that it does not take away from the most important part of this restaurant – the outstanding quality of the food.

The burgers are hand pattied daily and made to order with 100% American Beef that is preservative free and never frozen. The Boardwalk-style fries are hand cut daily from Russet Burbank potatoes grown above the 42nd parallel – creating the perfect texture, soaked in water and then cooked to order in no-trans- fat peanut oil and may be ordered with or without Cajun seasoning. The rolls are shipped in fresh from our bakery and do not contain fillers or artificial preservatives. All toppings are free and include crisp lettuce, fresh tomatoes, juicy pickles, sautéed mushrooms, green peppers, fried onions, A1 sauce, jalapeno peppers, hot sauce, mayo, raw onions, ketchup, mustard, relish and barbecue sauce. Kosher hot dogs are served split and grilled plain, or topped with cheese and bacon. Customers also enjoy complimentary in-the-shell peanuts served in bulk containers.

“As a Kent alumnus and a native, I am thrilled and honored to open our first store in Kent, “ said Matthew Mikola, General Manager of Five Guys Kent. “We are excited to see so many talented local applicants across the spectrum applying for our part-time and full-time positions including culinary/hospitality professionals, college students and high school students. With outstanding service provided by local talent, our award winning product and a fabulous location, we think the Five Guys Kent is going to be a favorite destination for this amazing community.”

Five Guys Burgers and Fries at Kent will be open for business daily from 11 am to 10 pm and is planning to stay open for extended hours on Thursdays, Fridays and Saturdays. It is located at 623 E Main St, Kent, OH 44240, across Rockwell Hall/The Fashion School.

Five Guys has been voted “The #1 Best Burger” for the past nine years in Washingtonian Magazine, rated number one “Bang for the Buck” in Zagat Survey and The Washington Post calls them “the Willy Wonkas of burgercraft.” Outside the Washington DC Metro area, Five Guys has won Best Burger awards in over 35 cities.

For more information, visit www.fiveguys.com or contact Matthew Mikola at pr@wholesomeburger.com.

About Wholesome Burger

Wholesome Burger, LLC is a restaurant development company that is developing 40+ Five Guys Burgers and Fries across NorthEast Ohio and Pittsburgh markets.

Contact: Matthew Mikola