Interesting to see the effects and to some extend, the lack of effects, on this small town. Obviously, there’s no guaranties how it would work elsewhere, but it’s an interesting case study of one that has been there for years.
Trends
Arbitrary and Capricious Fees
I just received the billing for this year’s Fire Protection Sprinkler System fee for Sand Hill Farm Apartments in Culver. I have discussed this fee here and here in the past. Despite protesting the initial basis for this fee, and the proposed increase during budget season, an 83% increase was passed.
The previous cost, $1,203.81 + sales tax was excessive and unjustified. The 83% increase to $2,198.98 + sales tax is nearly twice as onerous! There is no inspection or scheduled inspections, no maintenance, and no record-keeping. The only justification given is the cost of bringing water to the site, which the municipality would do anyway for residential service. 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. I’ll just skip over the whole idea of why there’s sales tax applied, other than to ask, what is being purchased?!
In the United States we have a generally progressive income tax system where individuals are taxed more when they make more. Conversely, we often have regressive fees that disproportionately hit the lower end of the income level. Culver’s Fire Protection Sprinkler System fee is an example of a regressive fee. There are not that many buildings with fire protection sprinkler systems in Culver, but those that do have it vary widely in size. A one-size-fits-all per building fee doesn’t take this into account. Of the buildings being affected by this fee, five of them are residential and subject to some form of rent control. Since there was a rather large rate increase to the water bill passed at the same time, this puts these lower income residents subject to a double hit.
Culver recently adjusted building permits. They were changed from a because-we-can high rate to a cost-of-service rate, justified by time tracking completed by the Culver Building Commissioner. This is a much more reasonable and defensible way of determining fees. If this were applied to the Fire Protection Service System fee, it would likely be zeroed out.
In the current Town Council’s defense, the water service fees have been left unchanged too long across the board, resulting in a larger than average increase. The blame for that lies on previous councils. That said, it’s not appropriate to hit the most vulnerable in the town’s population with an extra fee just to save a few cents on everyone’s water bills as the new fee structure is rolled out.
Exit Interviews for Businesses
Brandy Pohl announced the closing of Max’s Playhouse late last year. We worked with Brandy and her Architect, SRKM Architecture, on the remodeling required to bring the buildings up to early childcare standards in 2019-2020. (See this 2019 post after getting BZA approval.) We completely changed the look of the old duplex to give it a modern, clean, professional feel. We became friends and her business journey has been of interest to me. No one can accuse Brandy of not being passionate about her business and childcare in general. It was sad to see her journey in Culver end the way it did.
Brandy posted an offer to explain what transpired, causing the business model to fail, to anyone interested. This was to tell her story about why she closed, how she got to that point, and how she saw that affecting Culver. Only three people from Culver responded and in the end, only two of us showed up.
I am not going to attempt to tell Brandy’s story. It is hers to tell. But what struck me is that this isn’t a story about just a failed business. She has other similar businesses that are successful in other communities. This is a story of a business that couldn’t make it in Culver… A business that was struggling and, openly and publicly, questioning its ability to continue in Culver, while posts on Culver’s list serve, TGL, were asking for additional childcare facilities.
This was a somewhat unique opportunity. Unless there is a public statement about a retirement, most businesses close quietly. Business failures, even when beyond the owner’s control like this one, are hard to talk about. They usually involve financial costs and sometimes worse, like in this case, shattered dreams. I was disappointed there were no elected officials that took Brandy up on this. (Marty Oosterbaan was there from the CRC.) I’m not privy to whether they have met privately with her, but this seemed like a forum where they should have been represented. This was the chance for a rare, business exit interview.
The town is embarking on a new downtown redevelopment study. As I understand it, this is geared towards several goals, two of the most prominent being; 1) filling vacant commercial buildings and 2) preparing existing and new businesses to serve the growth expected from The Dunes development. Bringing in new businesses is much tougher than supporting existing businesses, and while not directly in the downtown target area, Culver just added another business vacancy with the loss of Max’s Playhouse. There doesn’t seem to be a question that this was a needed service.
I’ve learned from Brandy that childcare is a difficult business in Indiana. Unlike what we are hearing about the Minnesota debacle, there is excessive oversight paperwork, with many standards to meet. On top of that, it would appear that the rules change, at a minimum with every administration, but in general every year or so. That’s a tough model within which to work.
I would suggest that Culver could work on some form of business exit interview strategy. You would hope that there is communication before it comes to the point of a business closing, but if not, there should be an attempt to learn from any turnover happening. This could be something that the new consultant helps develop. Having the consultant do some of these along with a town official could provide valuable insight. A perfect example: How valuable would it be to the NFP group trying to revive the theater to know the personal and financial challenges that caused the theater to close? Others that fulfilled a perceived need that would merit a conversation, would be: 1) The Bennett family, who recently closed a second generation contracting and appliance business, 2) Don Baker, who ran a bicycle shop (Which seems like a natural fit with the push for trails and other outdoor recreation.), 3) Kyle Pugh, who ran the Axe to the Max axe throwing venue (Another entertainment venue that is a perceived missing piece in Culver.), and 4) George & Tammy Pesek, who moved the Evil Czeck Brewery (Another popular request.) and the Corndance to South Bend.
In the past, MCEDC has helped fill this role with their BEAR (Business Expansion And Retention) interviews, but MCEDC’s focus is more industrial. Also, when interviews are conducted, they need to be done in a friendly, open manor, rather than accusatory. Town officials can’t be offended when shortcomings are pointed out. Often, to the town’s credit, some of the shortcomings I heard turned out to be communication issues not actual deficiencies, i.e. there was a program or other service available of which the business was unaware. Culver generally does a good job of communicating, but respectful non-defensive listening is a part of that.
In whatever format, asking what businesses need in order to thrive is never a wasted effort, but it can become wasted if there is no follow up. In most cases, the exit interview is too late, but ongoing conversations could help eliminate the need for them.
Veterans Day Celebrations in the Midst of Turmoil – J.R. Gaylor
With turmoil foreign and domestic, we pause today to celebrate the living veterans for their service, their patriotism, their love of country and willingness to sacrifice in defense of our country. As important as it is to defend ourselves against foreign threats as our veterans have nobly served, there are some very insidious threats we are facing with America against itself.
Specifically, I am referring to the acceptability—by far too many—of the lawlessness we see happening, as well as the twisted logic behind the lawlessness.
We are seeing the direct contrast of the “broken window” theory versus “progressive criminal justice” model.
The theory of the “Broken Window” holds that addressing minor crimes like vandalism, public intoxication, and minor theft creates an atmosphere of order and lawfulness versus “progressive criminal justice” which promotes reforms such as ending cash bail, not prosecuting misdemeanors, and early release of offenders.
The justification behind this “progressive” thought is ‘because someone told a lie, it doesn’t make them a liar’. Or ‘because someone took a bribe, it doesn’t make them corrupt’. In other words, ‘if a crime is committed and no one is responsible, was there actually a crime at all’?
Famously said, “a great civilization is not conquered from without until it has destroyed itself from within.”
Next July 4th, we will celebrate 250 years of the great American experiment of Independence under a Constitutional Republic from which we aspire to form a more perfect union, establish justice, ensure domestic tranquility and provide for the common defense.
Let us aspire to recapture that vision.
J.R. Gaylor President/CEO; ABC IN/KY
Innovate Indiana Series
Easterday Construction is a member of the Indiana Chamber of Commerce. As such, I was offered the opportunity to share their table at two Innovate Indiana presentations in South Bend. Both featured Suzanne Jaworowski, Indiana Secretary of Energy and Natural Resources, as the key note speaker. The presentation was moderated by Gerry Dick of Inside Indiana Business, so it presented a pro-growth vision for Indiana. This series was one of several done in various regions of Indiana.
There were a few others from Marshall County present, though I only recognized people from Plymouth and Culver. One of them spoke in the morning round-table session and made the comment that they were afraid that our County is becoming the County of “No”. It was a bit disheartening to hear a titter go around the room followed by one of the people from downstate responding something to the effect of, “Oh, we know that well!” Ugh! Not what you want to hear.
That rolled into Ms. Jaworowski’s follow-up comments. These were the key take-aways for me:
- Energy production is a priority of the current presidential administration and Indiana wants to step up to this challenge.
- Indiana is promoting an “all of the above” position on energy. We still have coal-fired plants, but most of them have been upgraded and while not environmentally perfect, they are not the dirty coal plants of yesteryear. We also have productive gas-fired plants that perform well. We are expanding solar and wind energy production and looking into nuclear power. None of these are THE solution, but they can all be complimentary.
- Data Centers are critical to the growing AI industry and another priority of the current presidential administration. The President has specifically called out Indiana as a State primed for data center construction.
- Indiana is a prime location for data centers due to our position within the country and our access to the electrical grid. We also have generally good internet infrastructure. The power solutions listed above add to the attractiveness of our State.
- Indiana has taken a position requiring data centers to provide projections of their ultimate electrical needs and requires them to provide 80% of the upgrades necessary to provide for those needs. Most utility companies are taking this a step further and requiring them to provide 100% of the upgrades before any power is turned on. Locally, in the case of AEP, they require the data centers to pay the ultimate use bill from day one, before they have ramped up to that need, in order for AEP to guarantee that capacity down the road.
- Ms. Jaworowski indicated that this should lead to rate reductions for current rate-payers in Counties with data centers. An advantage our County of No will not have.
There was a round table discussion at lunch that talked about the need to be forward thinking and support businesses that support the communities. The role of the Regional Development Authority (RDA) was discussed. The RDA has made great strides, but is still far from the goals it has set for itself.
Absent from these meetings were elected officials from Marshall County. Elected officials from our other regional partner counties where there, which puts us at a disadvantage. Marshall County often seems to be treated like the redheaded step child. The failure of our elected officials to participate won’t help that.