Volunteering

All the Talk of Housing Costs

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I listen to all the talk on how to reduce housing costs from government officials and am amused and disheartened by the lack of industry involvement and thus understanding of the industry by those proposing cures. Much of the discussion is similar to the other conversations on inflation. (I gave some thoughts on inflation here.) Locally, I have been involved with Jack Davis’s Faith Based Housing Committee, the UWMC Housing Matters group, MACOG’s Marshall County Housing Study, One Marshall County’s Housing & Infrastructure Committee and the newly formed Marshall County Community Development Corporation (MCCDC) of which I’m a board member. Back before this I was on Culver’s Entry Level Housing Committee and the MC Crossroads Housing Committee. In all of these meetings, I can only name one other person from the construction industry, no others from the development industry and only a two or three from the rental industry that have been included. The unfortunate thing is that the industry has been blamed in some of these meetings, making it harder to ask them to consider participation.

The general theory is that the reason for the higher housing costs is all due to scarcity. The study done for the Housing Matters group came up with a deficit of 1,300 dwelling units for Marshall County. There is no doubt that scarcity is a factor, but more housing isn’t the panacea. Assuming costs are totally contingent on demand assumes that housing building contractors are taking advantage and price gouging because they can. In most situations, that is not the case. There are underlying inflation costs that have caused material and labor costs to spiral up. This is a problem that travels up from the bottom of the material supply chain. At a certain point, if demand starts to be satisfied, the incentive to build new housing goes away.

There are couple of other effects that seem to be overlooked. The first of these is the increase in property values. It is often stated in these meetings, that more new housing will make existing housing stock more affordable. Sounds good right? Until you’re the existing homeowner hoping to profit from your home sale. If some of these plans are successful, some who have counted on their home’s value appreciation will see a reduction in their net worth. The second effect is how this will affect property taxes for the county and municipalities. These governmental entities, while understanding the challenge to potential homeowners, have benefited from the increase in property values. While this is tempered by homestead exemptions, it has still been a net benefit as commercial residential property is affected as well.

The bursting of the housing bubble in 2008 has contributed to this problem as well. As so often happens, the pendulum has swung from the easy credit days back then to credit tightening to theoretically prevent another bubble. Homeowners need to show more steady income. Commercial residential developers/builders have to do the same, meeting a higher income to debt service ratio to satisfy lenders.

Add to these things, all of the new energy codes, safety standards and zoning hurdles and you find that building new homes is not always an easy prospect. Locally, there are attempts underway to start a land bank, streamline processes and in some cases provide short-term, low-interest loans. On the national scale, there are ideas bandied about such as 50 year mortgages, releasing government land for home construction and making down payments on a home something you can take from and/or hold in your 401(k) plan. All are interesting ideas, but not necessarily things that will make an immediate difference or be proven to be correct responses quickly.

I don’t see this problem going away quickly. Some of the “solutions” may result in unintended consequences. As is often the case, it may be best to let the market figure it out over time, but to the extent that it can be solved externally, I don’t think it will happen without all the players around the same table.

Culver – Downtown Redevelopment

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The Culver Redevelopment Commission (CRC) will be having a special meeting this Wednesday at 6:30. (See the notice to the right.) They are really making an effort to get a good turnout, thus the venue move to the School Admin Building.

The presentation will be from a company called Retail Strategies. They are one of three firms that responded to an RFP the town manager put out earlier this year. As you can see from the announcement, they are proposing to provide consultation on downtown revitalization for Culver, particularly looking at the two downtown corridors on Main Street and Lake Shore Drive.

The discussion at the CRC has been to look into what can be done to make our downtown areas more successful as a first step with future expansion to the rest of the town. This is partially a response to The Dunes and how to provide services for the additional full time residents the town hopes to attract.

I have a conflict, so I won’t be there for this presentation. My two thoughts on what I would have liked to hear are:

  1. The concentration on the downtown areas is fine as a first step, but that shouldn’t be done without also looking at the town as a whole and how everything fits together. Too often Culver falls into a one step back before two steps forward pattern. Inefficient at best. Generally costly too. I know we have a rough framework of what should happen in the town as a whole from the Comp Plan, but making sure any sub-plans fit holistically into the master plan is important. How will this concentrated plan fit?
  2. The thing Culver needs more than another analysis (We’ve been analyzed more than Tony Soprano!) is an implementation plan the town can actually do. Culver did great things with Stellar, but has somewhat stalled since then. The impetus to move things forward has to come from the Town Council. I’m not sure that they have the same fire that was there for Stellar. A restating of the problems we already recognize won’t hurt, but it’s that next step towards action that matters. Will the Town Council be at the meeting and will they step up?

This is meant for the downtown merchants, so I hope they step up too. This could be a major benefit to them, but only if they participate and help work the plan. I appreciate the Town Manager and CRC taking this on. They can’t just do it though. They need active participation and help from those affected. The town can assist in this, but the merchants and property owners have to take the reins at some point and make it happen.

Innovate Indiana Series

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Suzanne Jaworowski

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:

  1. 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.
  2. 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.

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