Last night the City’s whitewater park consultant (Mike Harvey of REP in Boulder Colorado) provided City Council with an overview of his firm’s conceptual recommendations for what could be done in the Cuyahoga River corridor in downtown Kent to enhance river recreational opportunities.  At the meeting I promised to upload Mike’s draft report and conceptual renderings but he hasn’t provided the draft report in electronic format yet so I can only post the graphic illustrations.  Of course, it’s easier to make sense of the graphic if you have the report available but I figured I’d go ahead and put the images up online anyways for those people who were at the meeting and they should have an idea of what they’re looking at.  As soon as I get the report from Mike I’ll post that as well.

Based on the data collected and the input received from the stakeholders, the consultant performed analytical and conceptual work to further develop some river concept design options that we could use to go after State grant funds that are available for these sorts of river improvements. Main Street and Parks and Recreation have already been coordinating with State agencies to give them a sense of how we hope to use this project to continue all the work we started with the Dam project and the initial feedback has been favorable from these agencies.

With the Dam project we made a significant impact on improving the water quality, and the idea of this project is to open up access to the new and improved river so that residents, students and visitors can enjoy it all year long. From the City’s perspective I continue to see this eco-friendly outdoor-activity as a unique business opportunity for us to capitalize on in our region that is both a quality of life enhancement and is also a part of the economic revival of the downtown. I can’t think of a better way to celebrate our river heritage than by having a plan for expanding river use in a way that connects the public investment we made to revitalize the West River Neighborhood to the redevelopment work we are now pursuing in downtown.

The concept design work will give us a list of improvements that we can consider, including ranges of costs, regulatory issues, etc. One of the tasks included in the scope of work was to begin to outline the possible economic impacts of a white water park with a range of examples of new business activity and local spending spawned by these types of parks. The purpose of this data is to give us a better sense of the costs/benefits and the rate of return of the improvements should we eventually choose to pursue any or all of them.

CLICK HERE FOR CONCEPTUAL DIAGRAM

I’ve only been in Kent for 2 years but as near as I can tell City finances have been tight for almost a decade so we’ve had to take a hard look at where we spend our money and ask hard questions about what could be cut. To date we’ve cut nearly $2 million from our budget. Everywhere I’ve ever worked social services have been targeted for cuts and even in Kent we’ve ended up reducing our level of social service funding by some 30% over the last 5 years. Ultimately the decision to cut social service funding or not is a function of what the community and City Council feel is most important. Social services are certainly important but are they the most important services we provide? So far the City Council has said yes they are — and now is the time of year that local social services agencies can apply for City social service funding.

The Community Development department has a $100,000 budget to allocate funds to social services agencies in Kent. These grant awards are made thorugh a competitive process and each grant request is evaluated based on it’s impact on Kent social service needs.  Below is the information that is being advertised so if someone you know works in a social service agency please share this with them.

Dear Social Service Provider:

The City of Kent will be considering funding for Social Services for the 2008 calendar year. Funding will be available to agencies that meet eligibility requirements, submit a formal application, and meet the approval of the Department of Community Development. A copy of the application form is enclosed.

The application submittal deadline is 4:00 P.M. on Friday, March 28, 2008. If your agency requests funding for two or more programs, separate applications must be submitted for each program. Be sure to submit three (3) copies of all application materials.

Should you have any questions, please feel free to contact this office.

Sincerely,

Gary Locke
Community Development Director

The Community Development Department of the City of Kent will be considering funding for social services for the 2008 calendar year. Applications are now being accepted for funding. To be eligible for these funds, an agency must meet the following requirements:

1. Perform a social service that meets one or more of the priority needs for 2008.

2. Be incorporated as a 501(c)(3) non-profit organization with IRS tax exempt status.

3. Be operating in accordance with all city, state, and federal codes, rules, regulations, and laws.

Eligible projects will be geared towards fulfilling the following priority needs in the City of Kent:

Community/Economic Development Services Emergency Assistance

Drug and Alcohol Abuse Prevention Services Housing Assistance

Long Term Care Needs of the Elderly Behavioral Health Care

Any agency submitting an application addressing a need, which is not on this list, is required to include information substantiating the existence and impact of that need within the Kent Community.

No grantee of the City of Kent will discriminate against any person for any reason on the basis of race, religion, age, sex, color, national origin, or handicap.

Each year the City recognizes the outstanding achievements of it’s Police employees and this year is no exception as Chief Peach has announced the Officer of the Year, the Supervisor of the Year, and Employee of the Year award winners. The Kent Police Department works a very high volume of calls so they’re always on the run to the next call which means we don’t get much time to thank them around the office for their accomplishments — so sharing their success stories with you in this blog is my small way of saying thanks for all you do for Kent.

1.  OFFICER-OF-THE-YEAR OFF. SUSAN K. GRAVES

2.  SUPERVISOR-OF-THE-YEAR LT. JAMES “RAY” STEIN

3.  EMPLOYEE-OF-THE-YEAR CHERYL BURG

PROMOTIONS
Capt. Michelle Lee
Lt. Donald Brown
Sgt. George “Ed” Wheeler
Disp-Coord Nichole Jacobs

FIREARM EXCELLENCE
Lt. Paul Canfield
Sgt. Jim Prusha

PHYSICAL FITNESS EXCELLENCE
Off. Mark DiJerome
Capt. Michelle Lee

OVI OFFICER-OF-THE-YEAR
Off. Marty Gilliland

PERFECT WORK ATTENDANCE
Lt. John Altomare
Det. Bruce Bassett
Lt. Paul Canfield
Off. Marty Gilliland
D/C Nikki Jacobs
Off. Norm Jacobs
Off. Jerry Schlosser
Off. Jason Sort
Sgt. Bob Treharn

30-YEARS SERVICE
Lt. John Altomare

20-YEARS SERVICE
Det. Bruce Bassett
Capt. Michelle Lee

15-YEARS SERVICE
Disp Kim Lafferty
Off. Jerry Schlosser
Det. Mike Roberts

10-YEARS SERVICE
Sgt. Bob Treharn
Off. John Romanoski
Off. Jim Ennemoser
Off. Norm Jacobs

Susan Graves is the recipient of the 2007 Kent Police Department Officer-of-the-Year Award.

Her exemplary commitment to service under extreme and adverse conditions established a professional standard which may never be surpassed. Despite significant injury and illness, her most concerning thoughts, words, and deeds continued to focus on how to best serve the Kent community, the Kent Police Department, and its members.

Her determined efforts to return to active duty and to continue her participation with the Northern Ohio Violent Fugitive Task Force proved to be inspirational for the entire Department. Susan rarely spoke of her condition or associated problems, but would continually ask and concern herself with matters relating to the well being of the police department and its members.

An example of her selflessness and love for the department was demonstrated when she fractured her back in two places while making an arrest. She did not reveal her injury and continued to work another two weeks under extreme pain rather than to seek medical care because she did not want to risk being placed on injury leave and further reduce staffing levels of the department. This was in addition to her disease taking away what little stamina she had left.

Susan’s humble demeanor of not seeking personal recognition, the sacrifices she made for department members, the level of commitment made to police service, and her determination to return to the job she loved, left an indelible and unforgettable impression on the character and tapestry of our organization. Her indomitable spirit shall be remembered as an important part of the character and professional standards of the Kent Police Department.

Your dedicated service to the Kent Police Department is truly appreciated. The exemplary manner by which you perform your duties as Investigations Supervisor reflects well on our organization and on the City of Kent.

Your performance demonstrates an excellent work ethic, integrity, a strong commitment to service, and a good understanding of effective personnel management for the varied components of the Investigations Section. You can be relied upon for solid leadership, for effectively directing complex and difficult investigations, and for demonstrating high professional standards during routine and extraordinary situations.

Your professional excellence has been recognized by members throughout the department and by the Portage County criminal justice system. It has often been said the greatest reward a person can receive is to be recognized by his peers for outstanding performance. To this end, you are to be congratulated! Your dedication to the Kent community is greatly appreciated.

Thank you for your accomplishment and congratulations for being chosen as the 2007 Kent Police Department Supervisor-of-the-Year.

Congratulations! In recognition of your outstanding performance in 2007, you have been recognized as the 2007 Kent Police Department Employee-of-the-Year.

As Administrative Assistant to the Chief of Police you have many responsibilities which affect the well being of police department members. Among them are payroll issues, overtime equalization and accountability, status forms, human resource issues, and the considerable, detailed paperwork associated with the hiring, retirement, promotion, step raises, etc., of all police members. You continually perform these duties in a very conscientious manner, and always to the benefit of police members and to the Department. It is often very easy for members to take for granted the high level of your performance and the many ways by which you affect the quality of their employment. The diligent manner in which you perform your duties is a credit to your exemplary work ethic. In addition, your daily performance with budget issues, purchase order, networking with other city departments, etc., although very demanding, is accomplished in an outstanding manner.

Your contributions to the Kent Police Department affect every component and person of the organization. Your commitment to the police department, the City of Kent, and to the well being of all police members, is greatly appreciated.

Again, congratulations for being chosen as the 2007 Kent Police Department Employee-of-the-Year.

For those fans of McGruff the police dog that takes a bit out of crime, I’m pleased to report that we have our own human version in Sgt. Ed Wheeler who took a bite out of graffiti this week by apprehending and arresting 2 people in River Edge Park who were armed with 20 spray cans worth of paint.  It turns out one was a male juvenile from Akron and the other was an adult female student from Kent State.  Given the recent spate of graffiti incidents this arrest couldn’t come at a better time.

Knowing my concerns over graffiti, and the difficulty we have catching someone in the act, the Police Chief shared an internal correspondence from Sgt. Wheeler that outlined the events of the arrest.  Here it is:

Report from Sgt. Wheeler
Today at 1813 hrs, two subjects were arrested in River Edge Park for spray painting. One male juvenile from Akron and one adult female KSU student were arrested. The female’s arraignment will be on Thursday February 21 in Kent Muni Court. Both were interviewed and confessed to today’s incident. The juvenile stated this was their first offense in Kent, however, they have done this in Akron. The female stated that this was their second time, the first being last week at the same location. They were in possession of two stencil. One was of a male bust speaking the name “FESTER”. The other was of a headless horseman image with the name “FESTER”. (horse with a headless rider) Apparently the juvenile’s tagger name is Fester.

I reviewed criminal damaging and criminal mischief. I went with criminal mischief because the elements fit better. Criminal Mischief is a M3, one degree lower than criminal damaging and the same degree as the Kent Graffiti ordinance. I went with state charges on both just to be consistent. I found criminal tools was a M1 and chose this over the Kent Graffiti Ordinance which makes possessing the graffiti implements a MM which is not even an arrestable offense. Both were charged with littering and the female for contributing to the delinquency.

After speaking with the juvenile’s parents, I left with the impression that they believe we have thrown the book at both of them. The mother was defending her son saying society had portrayed graffiti as art and has made it desirable towards our youth without educating them on the ramifications. The mother pointed out that you can get art books on this matter in the library and on line. The mother was afraid the city was going to make an example out of her son for every one else’s actions.

My comments to the mother was that her son was part of the problem and not the solution. I also asked if her son was spray painting “art” on the side of their home and if he did would he be held responsible. I made the mother fully aware of the ongoing problem in that area and the potential cost to the Kent taxpayers. And it should also be noted that I did not tow the car that their son drove to the park. I told dad where it was and had him take possession of it.

I love art and I admit some graffiti reflects artistic talent but damaging private or public property is not art no matter how good it is.  It’s a crime and I thought Sgt. Wheeler did a great job asking the concerned mother whether she allowed her son to spray paint their home.  He didn’t report her answer but I think we all know it — of course not.  It’s this kind of non-chalant, wink and a nod, look the other way attitude towards graffiti that makes it so hard to stop.

The Police aren’t making an example of this young man and woman — they’re just doing their job enforcing the laws and protecting our property from harm.  I’m sure anyone that has had to spend their time and hard earned money to try to clean up graffiti damage are delighted with Sgt. Wheeler’s good work.  And so am I.

It’s hard to open a paper and not find a headline talking about all the foreclosures and the rather grim housing and lending markets.  I even saw a report that ranked the Cleveland area as having some of the highest foreclosure rates in the mid-west — obviously that’s not a list you want to be on the top of.  I guess this is the 2008 version of the savings and loan crisis of the late 1980′s and hopefully the country will work it’s way out of this one with equal success.  In the meantime there’s been a lot of talk about what effect the sub-prime problems may have in Kent.  We’re still working on figuring that out too but here’s a few things we’ve been hearing.

After listening to the city manager from Normal Illinois come talk to our Council last week about how they borrowed $80 million to buy land and redevelop their old downtown into a new “uptown” — we got to talking about the cost of borrowing in Kent these days.  As you know, the interest rates are actually exceptionally low which is good (Normal Illinois actually got a 1.25% variable bond rate) but with all the foreclosures lately the banks are a lot more skiddish about who they’re willing to lend to and how much risk that loan may present.  That means lenders are looking for more insurance to cover new loans and in our case some of the equity insurance firms that we use have had to shut their doors — pushing that part of borrowing up quite high right now.

As far as annual city revenues go, the troubles in lending and the housing market fortunately have a buffered impact on the city government because the City only gets about .10 cents on the dollar of property tax.  Property tax is critical to the School system but it’s a comparatively small revenue source for the City.  But these days revenues big and small are important so we are closely watching the housing market and hoping for some stabilization soon.

For the most part, Kent housing sales have been slow but until recently prices had been holding better than some of our peers in the suburb communities.  It’s hard to say whether that will continue but I know that local realtors are optimistic for the spring sales season to hurry up and get started.

Kent’s Finance Director told me last week that there is usually a lag between market lows and impacts on City revenues by almost a couple of years.  So she’s figuring our 2009-10 budget will be when we first start to see a drop in property tax revenues if the trend doesn’t correct soon.  We are worried that if the resale market doesn’t pick up unsuccessful sellers will look to convert single family homes into rental properties — which is a problem since close to 70% of our housing stock has already gone rental.

I’m not anti-rental, rentals in proportion with home ownership can be good — but like vitamins too much of a good thing can be bad – and I’m worried that we are nearing a tipping point in many of our traditional neighborhoods where increasing numbers of absentee landlords and the coinciding loss of pride in ownership has strained the fabric that holds a neighborhood together and has contributed to the erosion of property values.  And the more those values fall, the more people look to convert properties to rentals in an escalating cycle of decline.

We’re looking at ways to turn that tide but without a little help from the real estate market, our efforts are dwarfed by the dynamics of the larger economy.  For example, we have federal housing rehabilitation dollars that we’ve been trying to use to encourage more home ownership in some of our at-risk neighborhoods but even with our assistance we’re having a hard time finding people that can qualify and meet the federal lending standards.  So in the meantime more properties get converted into rentals with minimal reinvestment because economically that’s what makes sense in the short term but long term that spells real trouble for Kent neighborhoods.

Now that being said one of my favorite phrases is ”a crisis is a terrible thing to waste” which makes me hopeful that the sense of urgency that rises up from the housing and lending troubles may give us the motivation we need to get more innovative than we might be during better times.  I don’t want a crisis but if you have to have one, let’s make the most of it.

The adage of buy low sell high still applies and I have to believe that if prices continue to fall there will be some good buys out there and savvy investors will be ready to jump at them.  I’ve actually started to already see it happen in parts of Kent where prices have dropped and a new breed of investor has emerged looking to buy and flip the property for a profit.  Flipping properties isn’t necessarily the way to rebuild the sense of neighborhood that we’re looking for but it may be the first step towards where we want to go because those flippers see an opportunity to buy low enough that they believe they can reinvest to fix the property up and still sell it for a profit.

It’s that reinvestment piece that has been missing and it’s been my observation that investors are a competitive lot and where there’s a dollar to be made they gather quickly so if there’s a silver lining to all this I’m hopeful that it affords us the chance to see more reinvestment happen more quickly than it has in the past.  I guess time will tell.

In the meantime, here’s a few rather somber facts and figures about the state of our economy today from the point of view of the financial analysts.

Real Estate Investment Trust Returns of January 2008

“What a difference a year makes”

Year-to-Date Equity Market Performance

DJIA⁽¹⁾: -8.16%
S & P 500⁽²⁾: -9.33%
NASDAQ⁽³⁾: -13.10%
Russell 2000⁽⁴⁾: -8.76%
MSCI U.S. REIT⁽⁵⁾: -4.52%

(1) Dow Jones Industrial Average.
(2) Standard & Poor’s 500 Stock Index.
(3) NASD Composite Index.
(4) Small Capitalization segment of U.S. equity universe.
(5) Morgan Stanley REIT Index.

U.S. Treasury Yields (as of February 9, 2008)

3-month: 2.21%
6-month: 2.10%
2-Year: 1.93%
5-Year: 2.69%
10-Year: 3.64%

Pricing of Various Tranches of Commercial Mortgage-Backed Securities (as of January 30, 2008)

Rating; Term; Spread to U.S. Treasury Bonds

AAA; 5 years; +308 basis points
AAA; 10 years; +283 basis points
AA; 10 years; +514 basis points
A; 10 years; +764 basis points
BBB; 10 years; +1314 basis points
BBB-; 10 years; +1464 basis points
BB; 10 years; +1500 basis points
B; 10 years; +1600 basis points

Indicated Spreads for Conventional Commercial Mortgages (as of January 31, 2008)

Real Estate Capital Markets Update – February 8, 2008

Volume 10, Number 3

Brace Yourself…Massive stimulus packages, both on the monetary and fiscal sides in the U.S., have combined with talk of capital infusion to further support troubled segments of the monoline insurers—and all quickly assembled in order to put a floor under debilitating market sentiments and perhaps engender a turnaround. There was much discussion about whether the American economy would enter into a troubled recession and what effect it would have on the rest of the world. In an effort to stave off what seemed like a broadening financial panic, America’s Federal Reserve cut its key interest rate by three-quarters of a percentage point, to 3.5%, the biggest single cut in a quarter of a century. The unusual intervention, a week ahead of the Fed’s scheduled January meeting, soothed nerves in American markets when they reopened after a holiday. And a push to offer fiscal stimulus was quickly offered up in support. So many of current stresses are unprecedented in scope that even in the face of market rebounds, one needs to worry whether more pain was around the corner. The failures in mortgage finance with all its intricacies of financial engineering are actually troubling precursors of what may still unfold in the world of business credit. So many layers of debt have been created in recent years and packaged and syndicated under the very best of circumstances that unraveling this web when business opportunities shrink will be no easy task. It is noteworthy that the majority of leveraged business loans today trade below par, an amazing about face from the past few years when virtually every loan traded above par. And the gap between where loans and bonds are trading may be a harbinger of more corporate stress that is on the way. Given all the financial ingenuity and complexities, the level of corporate stress will be way higher than the official count of defaults. Beware the contagion.

The Risks… The Federal Reserve policy minutes reveal the extent of their concerns and they run deep. Not only were mortgage-related losses impairing balance sheets at major financial institutions, the policymakers were also worried about credit losses spreading out to credit cards, auto loans and other forms of consumer credit. These potential losses were leading to tighter credit standards for most lenders. Balance sheet pressures could also be exacerbated by concerns over “rating-agency and regulatory capital requirements.” In addition, banks were experiencing unanticipated (and unwanted) growth in loans because of illiquidity in the market for leveraged loans. In other words, banks could not sell loans that backed leveraged buy-outs, and these loans were now unexpectedly adding to capital requirements. Some members of the Committee worried that an “unfavorable feedback loop” could develop in which deteriorating credit market conditions would restrain economic growth further, leading to additional tightening of credit and even slower economic growth. Such a development “could require a substantial further easing of policy.”

Bond insurers spark new fears over credit crisis

Fears that the credit crunch might be entering a traumatic new phase grew yesterday as investors lost confidence in the insurers that guarantee payments on billions of dollars in bonds. Shares in Ambac Financial and MBIA, the world’s biggest bond insurers, fell 52 per cent and 31 per cent, respectively, as Moody’s Investors’ Service raised the possibility that both might lose the triple-A credit rating on which they depend. The sector was dealt another blow when Merrill Lynch said it was writing down $3.1bn in hedges with bond insurers, mostly with ACA Capital, a guarantor that has lost its investment-grade rating and needs to raise $1.7bn by today to avoid insolvency The triple-A credit rating of the bigger bond insurers is crucial because any demotion could lead to downgrades of the $2,400bn of municipal and structured bonds they guarantee. This could force banks to increase the amount of capital held against bonds and hedges with bond insurers – a worrying prospect at a time when lenders such as Citigroup and Merrill are scrambling to raise capital.

Analysts predict it could be a long time before money markets return to normal

“We’re not going to go back to normal,” were the grim words of a New York money market trader in early December, as central banks prepared to pump billions of dollars into the inter-bank markets to revive liquidity. Their efforts gave some temporary relief and the cost of short-term borrowing fell, but traders and fund managers believe it may take until the second half of this year for liquidity to return to this part of the market. Pressures are worse than Y2K or the advent of the Euro. Even with the passage of year end spreads remain elevated. Our take is that central banks have put the financial system on life support.” Unlike in 1998, during the Russian Ruble crisis and the collapse of hedge fund Long-Term Capital Management when money markets continued to operate normally, these markets, among the most liquid in the world, froze overnight in August.

Private Real Estate Debt Capital Markets

First big worry;…pricing; second big worry…capacity.

Pricing first. Spreads in the conventional, portfolio/balance sheet lender market (65% loan-to-value ratio, 1.2 +/- debt service coverage ratio, covenants, amortization, funded reserves, and underwriting based upon in-place income and expenses) seem to have stabilized, for the moment, in the ranges shown in the following chart although there is limited anecdotal evidence of actual term sheets being circulated and application letters being executed. While some have expressed consternation—actually they were more expressive—as to the width of spreads given demand, the strength of real estate fundamentals, etc., the downward path of the 10-year Treasury has effectively muted most of the impact of the widening in spreads.

Indicated Spreads for Conventional Commercial Mortgages (as of January 31, 2008)

The securitized commercial mortgage market is not quite so benign with spreads continuing to widen, regardless of the path of Treasury yields. The following survey, effective January 26^th, was provided by CohenFinancial:

The second big worry is capacity (or overall availability) of lenders to “lend”. Based upon the volume of transactions last year, which was a record year even though the markets were “closed” for a portion of the year, the markets have come to depend upon the securitized markets for as much as 80% of the long-term capital used to finance the real estate business. Estimates for 2008 show the life insurance sector committing a high of $50 billion to commercial and multifamily mortgage financing market and the conduit sector committing a similar amount. So…capital will be dear, hard to come by, rationed, constrained, and expensive…say it any way you want.

Not surprising are the results of the Federal Reserve Board’s most recent Senior Loan Officer Opinion Survey which indicated continued tightening of lending standards for all “sizes” (large, medium, and small) of commercial and industrial borrowers as well as for all forms of residential mortgage finance. The survey also noted weaker demand for commercial [real estate] mortgage loans.

Moody’s Economy.com noted in its analysis of the survey that when banks were queried as to why they had “tightened standards on C & I [commercial and industrial] loans during the period [October 2007 to January 2008], most banks cited a more uncertain or less favorable economic outlook, worsening of industry-specific problems and a reduced tolerance for risk”.

And speaking of reduced tolerance for risk, Economy.com noted: “The January survey also included a special question on the outlook for loan quality in 2008. The majority of the respondents expect to see further deterioration in loan quality in 2008. Between 75% and 85% of respondents expect deterioration in the C & I loans. A similar percent expect to see weakening in mortgage loans, while 70% expect credit quality in both credit cards and other consumer loans to worsen”. Ugh!

Opportunities or Anguish? Analysts are beginning to try to quantify the issue of refinancing risk, which together with depressed homebuilder stocks and single family lot deals, seems—at present—to the opportunistic plays in the cycle. According to Realpoint, approximately $25 billion of securitized commercial mortgage loans are maturing in the ensuing 12 months. Our sense is that we do not have to worry too much about loans written before 2004 being able to be refinanced as enough time has gone by for improvement in property fundamentals to offset weak and/or aggressive underwriting.

But, the 160+ loans which have an aggregate loan balance in excess of $19.0 billion+, that were funded during the “heady” days (high loan-to-value ratios, low debt service coverage, interest-only, few covenants, etc.) certainly could face difficulty in the current lending environment and therefore represent opportunities for well-capitalized investors to assist “over-leveraged” borrowers in getting their financial house in order—at a price.

Last week the City’s Public Service Director, Gene Roberts gave a presentation to City Council concerning options to consider regarding possible changes to trash service management in Kent.  As you probably know, Kent residents currently make arrangements with a private trash hauler for trash service on their own (also known as a trash free-for-all).  This is the first city I’ve worked in that didn’t manage trash service in any way and based on Gene’s research I tend to agree that it’s time to at least look at our options.  Many communities have decided that there are advantages to their residents to have the city participate in managing trash services and Gene  described those advantages to City Council in his presentation.

After Gene’s presentation, City Council voted to allow staff to continue to research this issue and they asked us to bring back a recommendation later this year for Council to consider.

Here’s the memo that started it all and if you scroll all the way down you can watch Gene’s powerpoint from the Council meeting.

From: Bill Lillich, Safety Director
Gene Roberts, Public Service Director
John Ferlito, Health Commissioner

RE: City Wide Trash Hauler Franchise

On October 25, 2006, Kent City Council requested staff to investigate City Wide Trash Hauler Franchising and during discussions of the Pending List Council was informed that they would be provided an update prior to the end of summer. The following information and attached matrix is provide of Council’s consideration. During our preliminary informational investigation, several positive issues surfaced and some issues which create concern but as an initial summary, the potential for citywide trash pickup service seems very plausible.

Staff investigated the feasibility of implementation of a City Wide Trash Hauler Franchise. What was learned is there appears to be a wide range of methods currently in place and being used by other Cities. The most simple of methods is bidding trash service for a community’s residents allowing for rate stability and equality and the trash hauler companies work for and invoice directly the individual residents. The other end of the spectrum includes City’s where municipal employees and equipment are used to pickup residents’ trash.

Currently in the City there are eight companies licensed by the Health Department to operate in the City. The Health Department licensure process is designed to verify that the equipment operating in the City is safe from a health standpoint (i.e. that trash trucks are not leaking fluids onto the City streets). Using a factor of 75-percent of the eight licensed companies operating on each city street equates to six trash trucks on each City street collecting trash weekly.

Operationally there are a few trash haulers that could collect all trash from all residential property in one day. However, it is reported that if the City could be divided into quarters additional companies could bid based on their current available equipment and manpower. Dividing the City into quarters has the additional benefit of trash removal operations four days a week thus placing equipment in the City to respond to requests for additional services as requested by the City.

Discussions continued regarding bidding the franchise to include the total City or individual quadrants of the City. Two issues surfaced, first the potential for service cost differential between different areas of the City and second the possibility that one quadrant may not receive bids.

Review has determined that typical franchise agreements in other communities are for 5-years. The agreements are structured as 3-years at a guaranteed price with two one-year options to be exercised by the City. Typically negotiations with the vendor that demonstrates an increased operational cost such as cost of fuel, labor or dumping charges are the bases for a cost increases to the trash hauler. Additionally the agreements typically include a fuel surcharge and land fill fees increase clause that defines when and if additional costs associated with increased operating costs could be passed to the City.

The last topic investigated is how to handle commercial and industrial accounts. The recommendation that the City not venture into the commercial and industrial trash service because of the major differential that occurs between commercial and industrial versus residential accounts. As an example, some commercial accounts receive daily or every other day pickup where others require every other week pickup. Industrial accounts depending on what is deposited in a dumpster may require special handling.

We respectfully request Council Agenda time to discuss staff preliminary findings and determine Councils interest in continuing further staff efforts to determine detail contract, costs and operational specifics for implementation of Citywide Residential Franchise Trash Collection Service.

CLICK HERE to review Gene’s powerpoint presentation.

Last week we had a guest from Boulder Colorado, Dr. Spence Havlick, come visit us here in Kent to talk about his experience and observations for how college towns deal with traffic issues.  As a Councilmember for over a decade in Boulder he actually had insightful things to say about a lot of different town/gown issues but clearly his passion centered on promoting walking and biking.  No wonder I liked this guy so much, biking is his passion.

Boulder and Kent have their differences but they also have a lot of interesting similarities and Dr. Havlick seemed right at home here.  As a matter of fact, he’s been on campuses all over the country and he said Kent really surprised him.  Harkening memories of 1970 he admitted that he and his friends wondered if he’d be safe in Kent figuring a riot could break out at any time.  Obviously none broke out and he must have told me 10 times how much he really likes Kent.  He said we have the makings for something really special here — and I happen to think he’s right.

First off, it’s important to know that Boulder is a bigger city than Kent with a population of just over 100,000 (compared to Kent’s 27,000). Dr. Havlick said that one of Boulder’s biggest challenges right now is having too many jobs and not enough people to fill them — I wish we had that problem.

Boulder has a people shortage because they adopted a self imposed limit on their housing growth each year, capping it at 1% a year.  They’ve also purchased over 55,000 acres of green space surrounding their city to make sure they never lose the natural beauty that is such an important part of their community.

They never adopted a cap on business growth (who would?) and apparently what’s happened is that job growth has increased faster than their people growth which means a lot of people have to commute in every day from distant cities.  You can tell that drove him nuts because Boulder has done so much to break it’s addiction to cars and it pains him greatly to have people have to rely on a car but with no more houses left in town what’s the option?  Apparently one option is to spend 6 billion (yes, that’s a “b” not an “m”) for new commuter rail service that they’re building to get more people on transit to get into Boulder.

You’ve got to give Boulder credit for putting their money where their mouth is.  When they decided that they wanted to make walking and biking the top transportation choices in Boulder they began a construction spree of hike and bike trails all over the city.  And they don’t just take the easy way out forcing pedestrians to follow wherever they build the trails;  they actually figure out where the pedestrians need and want to go first and then they get creative in building the trails to follow those desire lines.  They also actually plow the hike and bike trails before the streets to honor their transportation priorities that puts people first, bikes second, buses third and cars last.

I was impressed by the fact that rather than forcing pedestrians to cross vehicle traffic lanes at bridges, they’ve gone ahead and built 74 underpasses that take the trails under the bridge so people and cars stay separated.  It’s really expensive to do it that way but it works.  And they know it works because they track how many vehicle miles are driven each year in Boulder and through a serious investment in trails they’ve reduced car miles by 20% over the last 15 years.  That’s impressive.

Boulder also said that if cars need service stations so do bikes so they’ve created bike stations all over town that offer minor repairs, fix flats, tighten brakes, etc.  These stations have become local hang out spots for bikers which is pretty cool.  They’ve put thousand of bike racks on every bus and all over town and they’ve built lockers for bikers to store their stuff.  Boulder is definitely biker nirvana.

The University of Colorado has jumped on board the biking bandwagon too promoting alternatives to car usage and pricing parking high in order to create a financial incentive to walk and bike.  The University even pays faculty to not drive their cars.  They’ve built a great campus trail network although Spence raved about Kent’s esplanade.  He said he just wants to see it extended all over town off campus.

One of the non-traffic innovations that Spence talked about was that the University of Colorado offers all graduates of the university free use of the university facilities after they graduate including the library, rec center, office space, etc.  The idea is to encourage students to stay in Boulder after they graduate which is exactly what we want to do here in Kent, which is why I love this idea.  I see an email in the works to Dr. Lefton’s attention in the near future.

He talked about the promise of Kent and he encouraged bringing the community and the university together to plan how to use bike and hike trails to be a catalyst for quality of life and business development.  He said it’s been Boulder’s experience that thoughtful planning followed with a real commitment to build the plan enabled them to break thru conventional barriers of college towns and create the unique place that Boulder has become.

At the end of his two day visit I had a sense of affirmation that what we’re doing is right on track.  As Spence departed he urged us to just keep it up and stay passionate about Kent’s future.  And in between, get out and ride a bike, it’s the best renewable energy source going.