Month: July 2025

Regressive Fees

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We generally talk about taxes being regressive or progressive. The income tax in the U.S. is generally considered a progressive tax system, i.e. the percentage of tax paid on income progressively increases the more you earn. The Top 10% of taxpayers in the U.S. paid 75% of the total income tax paid, while the bottom 50% of taxpayers pay 2.3% of total income tax paid, per the the Tax Foundation. This is opposed to sales tax, that is applied evenly across the board, but takes a larger percentage of a person’s total income, the lower they are on the income scale. While this is debated incessantly (“Billionaires don’t pay their fair share!”), the various governmental fees are rarely factored in.

I discussed this in a post (Deposit Dilemma) last year, when we first opened Riverside Commons Apartments in Plymouth. At that time, Plymouth required a $150 deposit to start water and REMC required a $350 deposit to start electric, for a total of $500. This for an apartment where some residents were paying less than $400 for rent due to their reduced income level. A similar problem has been brought to light in Culver as the Culver Town Council struggles to meet their water service obligations.

There was a Public Hearing for a new water rate ordinance at the Culver Town Council meeting last week. For various reasons, Covid being one of them, Culver has not raised rates in nearly 15 years. Kicking the can down the road has led to somewhat dire straights and they need to do something. Even those opposing specifics of the rate change, me included, acknowledge that some form of rate increase is needed. Because water service is a service, there is no methodology to do progressive billing. Fairness prevails and the rate goes up across the board with no favoritism. Where this falls apart is in the fire protection fees, specifically fees for fire sprinklers.

The State of Indiana requires new apartment buildings to have fire sprinkler systems if they have more than two units. Somewhere in the past, municipalities were advised to charge fees for these. In reality, it is a tax, as a fee would imply there is some service provided. No service is provided beyond providing water at the street, which they would do anyway. Because it’s termed a fee, there is sales tax attached to this, despite no product or service being provided. We can talk about the life safety benefits of a fire sprinkler system to residents and fire fighters another time, but this cost appears to be without merit.

There is no inspection or scheduled inspections, no maintenance, and no record-keeping. The only justification is the cost of bringing water to the site, which the municipality would do anyway. Reasonably, water usage for a fire in a building with sprinkler system would be significantly less than that used to fight a fire using traditional methods, since fire sprinklers generally put out the interior source before the building is engulfed.

The existing fire sprinkler fee is $1,200. The new ordinance proposed a fee increase of 83% to $2,199. Several points on this:

  • The fee is per system, with no adjustment for line size, square footage covered, commercial vs. residential. On a reducing scale of coverage, CabinetWorks pays the same fee as The Cove, which pays the same fee as Sand Hill Farm Apartments, which pays the same fee as one 8 unit building at The Paddocks. Because there are three separate apartment buildings with fire sprinklers at The Paddocks, they pay this fee three times.
  • This fee had little justification before, but the increase is not tied to any increase in service or increase in cost other than the overall cost of the water system. Whether a structure has a fire sprinkler system or not, does not affect that cost.
  • When this fee is applied to residential units, this results in a double hit, since the resident will experience the increased water bill for their water usage and then a second hit for the fire sprinkler fee. This may come as a rent increase for apartments or a HOA assessment for condos.
  • Because this is labeled a fee, Sales Tax gets layered onto this, further increasing the burden.
  • This unintentionally targets the most vulnerable. Renters often fall on the lower end of the income spectrum, so this fee is extremely regressive, hitting those least able to pay.

The Town Council did listen and delayed a vote on this. (Much Appreciated!) The Town Manager said he would do more research into this. I will be interested to hear the background on how this fee was set and whether there is an option for more fair and equitable sharing of costs.

Cadence

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From my days in marching band, the cadence was the music played by the drumline that set the marching pace. It’s also defined as, “the beat, time, or measure of rhythmical motion or activity”. The definition that fits this post is, “a rhythmic sequence or flow of sounds in language”.

I attend a fair number of public meetings each month and many of them include the Pledge of Allegiance. With the advent of online meeting participation, you occasionally have someone’s disembodied voice from the ether, trying to participate, but because of the lag, it is just a little off. Is there much that’s more jarring? With the Pledge being removed from schools in some places, I wonder if that portends the future. I don’t remember learning the cadence of the pledge, but I do remember learning and reciting it from early in grade school. I can only imagine how jarring it was when Dwight Eisenhower signed the bill adding “Under God” to the Pledge in 1954!

Cadence shows up in other areas where we often don’t recognize it until it’s missing. Have you ever heard someone rattle off their Social Security number without a pause after the third and fifth number? Or even worse, can you even write down a phone number someone gives you if they don’t pause after the third and sixth digit? If you ever want to really throw someone off, give them your phone number with a pause after the fourth and seventh digit. Watch the brain melt that occurs! Ha!

The Lord’s Prayer also fits this description. Most of us know the cadence and can recite it by rote. Though Catholics and Protestants say it slightly differently to trip up any outliers in the congregation. Some of my nieces and nephews attended a Catholic school that tacked on, “Please provide for those with nothing to eat”. Nothing wrong with that sentiment, but it does kinda throw you off when you’re not expecting it.

The Pledge of Allegiance is variously described as a poem or lyrics. Since it doesn’t rhyme, I don’t hardly recognize it as such, but then my taste in poetry is limited to bawdy limericks… (There once was a man from Nantucket…) While the pledge doesn’t rhyme, it does have a rhythm. It’s the little things in life like this that are crutches that make things easier and bring us together. If I’m walking and hear a drum cadence, I can’t help but fall into step. I’ve never really considered myself a conformist, but I do think we need more of the things that bring us together. The little daily occurrences of cadence are one of those things. There is a downside though. All of us continue to recite the pledge and say the word “indivisible”, but more and more it is being said by rote without taking the meaning to heart.

Happy Little Trees…

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It’s too bad that maintaining urban trees isn’t as easy as Bob Ross painting them… They take a lot of work and planning. There are occasional “Happy Little Accidents”, but they don’t always workout so well over time…

I took advantage of Emerson Wells’ office hours a couple of weeks ago and met with her to talk about Culver’s trees. Ms. Wells attends Indiana University and is part of the McKinney Climate Fellows program. It was an interesting discussion. I learned a bit about why Culver is working with her and hopefully contributed a little history and insight from another perspective.

One of Culver’s best aesthetic features is its abundance of mature street trees. Unfortunately, a limited budget has made if difficult to start replacement trees for when the existing trees age out. Then there’s the issue of the indiscriminate butchering of existing trees by utility companies. Ms. Wells is working with the Culver Tree Commission to do some tree canopy analysis, some targeting of tree needs and a maintenance plan to help make sure new planting thrive and older trees are preserved. It was interesting to hear that she was allowed to expand the program, working with the Lake Maxinkuckee Environmental Council, to provide insight on lake shore trees outside town limits too.

After that meeting, I heard from Kevin Danti, Culver Town Manager, that there was some consideration to planting some of this year’s trees on the two Culver Sand Hill Farm properties, Sand Hill Farm Apartments and The Paddocks. I let him know I would be interested in participating. For that reason, I also attended the July meeting of the Culver Tree Commission to hear a little more about their plans.

Culver Tree Commission with Ms Emerson Wells

Despite being a serial meeting attendee, this was only the second or third time I’ve attended a Tree Commission meeting. (It’s been a while as the group is nearly all new members since my last visit!) It was interesting to hear some of their plans and their approaches to things. The Commission is a working group that not only makes the decisions at meetings, but also shoulders some of the installation and maintenance involved with municipal trees. There is some hope that a working subcommittee might be formed to help them. Ms. Wells suggested that she could bring in some people to help with training. I was also pleased to hear that they are going to do the paperwork to re-establish Culver as a Tree City USA community. Apparently, Culver meets all the standards and just neglected to do the paperwork to maintain that status sometime in the past.

The main suggestion I gave Ms. Wells was to consider plantings on the town’s property at the NE corner of Davis and Ohio Streets. This is the new well location and adding some environmental protection there would be good. Plus there are some storm water drainage problems in that area that would benefit from removing some of the impervious surface on that site. Since I couldn’t talk the town into improving the South Main Street/Davis Street intersection with a traffic circle, making it more aesthetically pleasing would be a fall back position. It won’t provide the same safety improvements, but such is life…

Fingers-crossed that Ms. and the Tree Commission are able to do all they hope to do. I think the plans will be a benefit to Culver. Having a plan for the future and not just this year is a big step in the right direction.

Institutional Memory

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At the last Culver Town Council meeting, Greg Hildebrand, President of the Marshall County Economic Development Corporation (MCEDC), made a presentation on 2024’s accomplishments and some overall accomplishments through the last several years. Culver’s representative to the MCEDC board turned in his resignation that night as well. Greg told the board he was researching their question about public officials as MCEDC representatives.

As Culver’s first MCEDC representative and as such, a founding member of the MCEDC Board, I found the question surprising. But then I checked the MCEDC website and there is only one board member still there from the early days. Greg is the 6th person in the staff leadership role, so he has no knowledge of the start-up.

Every institution, whether public or private, must evolve. Unfortunately though, when institutional memory is lost, that evolution can involve back-tracking, repetitive spending, and potential repeating mistakes. In the case of MCEDC, the original representatives met for nearly a year before actually forming the corporation and hiring staff. We met with multiple existing Local Economic Development Organizations (LEDOs), which were set up with various structures in order to try and determine what was best. These ranged from local government departments to quasi-government /private partnerships to independent private corporations. We met with site selectors to determine with which form they preferred to work. We met with the State economic development arm, to get their take on what was most effective. Once we determined that the private corporation structure was most flexible and preferable, we researched various corporate forms before deciding on becoming a 501c(6) corporation. Then we hired Ice Miller, one of Indiana’s leading law firms in the area of economic development to help craft our by-laws. Three key take-aways from this:

  • Many site selectors and companies considering a move do not want it public until a decision is made. If the LEDO is a government department or has government representatives on the board, there is a concern about required disclosures that make the potential new business squeamish. For this reason, MCEDC prohibited public officials from holding board positions.
  • A public funded LEDO has more strings attached due to direct tax payments covering costs. MCEDC was set up with service contracts to the various government bodies, so that the services are provided on a consulting basis. This has allowed funding by local Redevelopment Commissions. (It has also caused a few problems regarding flexibility due to government bodies specifying deliverables… not something included in the original contracts.)
  • 501c(6) status makes the corporation a tax exempt entity, but with different abilities and restrictions. This allows contributions from private corporations and individuals to be tax deductible. One other key benefit is a 501c(6) is allowed to lobby government representatives.

The decisions made and the reasons for making them were lost with the retirement of the original board members.

The loss of Institutional Memory has been demonstrated to me in the past from other boards on which I have served too. A new board member has a “new idea” or one they’ve used elsewhere. Institutional Memory could demonstrate how something similar was tried in the past with the associated success or failure. That doesn’t mean the idea may not be worthy of implementation or in the case of past failure, trying again, but maybe it can be improved by past experience or there may be unique reasons why it didn’t work in the past. It could even have left a bad taste in the mouth of donors/supporters and that alone is a reason to avoid it. Board turnover may prevent that experience from moving forward. Sometimes with strong-willed, long-serving staff leadership, the Board gets overshadowed, deferring to staff leadership when staff leadership’s tenure exceeds that of any board member. The Staff becomes the Institutional Memory for better or worse…

I don’t have a great solution for this. Board minutes would be the first line of defense, but there is a wide variety in the way organizations keep minutes, ranging from the bare minimum required by Robert’s Rules, to copious detail on every side conversation. Each has its uses and there are differing schools of thought on which is appropriate for different organizations. Minutes rarely catch everything though.

So here are a few suggestions from my experience on multiple boards:

  1. Minutes should be digitized and searchable. They should be easily available to current board members as a reference. They should be searchable by dates, names and key words. (When I was Secretary of the MCEDC Board, I kept a running to-do list of board decisions that I included at the bottom of the minutes and updated it monthly with new things directed by the board and removing things that were completed in the last month. The Executive Director hated that, but it was useful for accountability.)
  2. Along with board minutes, institutional history should be kept. This can be in a narrative form, added to monthly and included in total, attached to the first meeting of the year’s minutes covering the previous year. This should include successes and failures, in enough detail for a new board member to easily understand what happened. This should also be easily available to current board members in a searchable form.
  3. Board members should be encouraged to provide a summary of their time on the board with the associated highlights and missed opportunities. What stands out when looking backwards can often provide insights and direction for what comes next. This should also be easily available to current board members in a searchable form.
  4. Paid staff should be encouraged to provide their input since they are the day-to-day face of the board and have invaluable insight into what is happening. That said, they should be reminded when necessary that they are not board members, do not have a vote, and are charged with carrying out the board’s directives. (Most of those I have worked with understand this and use their influence judiciously, but I have worked with some that abuse this or balk at taking direction from the board when it doesn’t go their way. They and the board must understand that if this happens too much, it is time for a parting of the ways…)
  5. The searchable sources under 1 through 3, should be consulted anytime there is a new project, staffing change, board reorganization or other activity that could be positively influenced by what came before… This should be a staff function, but should also be considered by anyone suggesting something new or a change in direction. Learning from the past is invaluable.

I believe strongly in refreshing boards and the regular influx of new blood. I think term limits are a reasonable approach to allowing board members a way out as well as a way to encourage new blood, even though this is at the expense of Institutional Memory. But that doesn’t change the fact that the loss of Institutional Memory causes mistakes to be repeated, costs to be repeated and some people to be re-offended. There is a balance for which we should strive, else like MCEDC above, we lose the benefit of the work done in the past.

“Those who cannot remember the past are condemned to repeat it.” – George Santayana, The Life of Reason, 1905