Lawrence.com

Posted by Keith Campbell October 23, 2007 at 2:59 p.m.

Pool Fees, Parking Meters, Crossing Guards

On August 19th Chad Lawhorn of the LJ World [wrote][1] that the couch cushions in city hall are not strewn over City Hall, but I am starting to wonder if the couch strategy would make more sense than some of the approved and discussed revenue streams coming from city hall. I would like to address a few of them here.Pool FeesI am perplexed by the city's decision to [ raise pool fees for children][2]. A basic class in economics will teach you about the price elasticity of demand for a non-essential item. I think it is safe to assume that demand for the pool is price elastic. It follows that as the price for the pool increases that demand will decrease. Consumers will find a substitute to the utility that they receive from going to the pool, or they will decrease their "consumption" of the pool for other, cheaper entertainment options. What will we do if, after raising our fees, the demand for the services decreases and we receive less revenue? And economist would tell you that this is a real possibility.Let's say I am wrong (as is economic theory) and that the demand for the pool is perfectly inelastic. The increase in price will not impact demand. According to this [memo][3] this is the assumption the city made in regards to the demand for the pool services after the increase in the pool fee. (I think we can all agree that 71% increase in children's fees is not going to increase the demand.) How much money are we talking? In this best case scenario, how much additional revenue will the city receive? There is a wide fluctuation in children paying cash to go to the pool, but the memo can provide an average attendance which should provide a workable analysis. Using a three year average in our "best case scenario" the increase in pool fees for children is going to add an additional $66,592 to the city coffers, or .045% of the overall city budget. What meaningful impact is this going to have on the bottom line? Is this the best public service to target to get additional revenue? There have been some nice articles about regressive taxes; I ask is this a regressive fee? Who will be impacted the most by the decision to raise the pool fees and is this best way to raise such a seemingly insignificant amount of money for a 146 million dollar budget?Parking MetersOn May 27th of this year the [LJ World reported][4] a $270,000 dollar shortfall in covering the expenses of parking operations. The article notes, _ "The 2007 budget calls for the city to spend about $1.15 million for payroll and maintenance activities, but parking meters, fines and permits are expected to generate only $880,000. The city has budgeted to tap into its fund balances - the equivalent of a savings account - to cover the $270,000 shortfall."_ Currently, the city is [considering extending the hours of the parking meters][5] as a "revenue generator."If the current department is running efficiently then any additional patrols will logically require hiring additional staff or paying overtime for these additional patrol hours. After we pay for this additional staff how much additional monies are we talking about? It seems logical that the extension of hours will end up costing us more, we currently loose money, so how does extending the hours suddenly make it efficient? I don't think more hours will equate to better efficiency, but for the sake of discussion I can attempt to answer my own question. If the city examines the fixed and variable costs of additional metered hours and compares this to the expected additional revenues- it may be possible that the fixed costs would remain unchanged (or very low) and the additional revenue will offset the variable costs increase. In this case the additional hours would make economic sense. (I would just like to see the city announce what the costs of the additional hours and the anticipated revenues of the increased hours will be. In this best case the program loses less money.) If the goal is to try to loose less money, then should that be upfront in the discussion? With the current "income" received from our parking system: is a city that public declares its committment to its downtown serving it best by requiring people to pay a meter and receive tickets? Is this creating a postive experience for the consumer? How many shopping centers and restaurants in Johnson and Shawnee County require you to pay to park? Is the experince of downtown worth the costs? The question for me is what would the cost be if we eliminated the parking meters? Would/Could the city actually save money? The Resource Office/Crossing Guard On September 6th the LJ World ran an [article][6] noting the City's desire to have the USD 497 help fund the costs of school resource officers and crossing guards. This news should send up red flags to tax payers. Currently you pay three entities via your mil levy on your personal property taxes: city, county, schools. The city is looking to decrease their obligation to fund this program. The city needs this money to cover other budgetary shortfalls. So, your city mil levy will not decrease if the schools agree to fund a larger chunk of this program. The question is how will the school system pay to maintain the current system? Simple, they will most likely raise your school mil levy. The city pays for less, the tax payer pays more. Essentially you have two entities haggling over which organization will be responsible for charging the taxpayer for this service. In all fairness it looks like the city may have a valid equity of payment of services argument. Other cities (in their hand picked analysis) do show that other school districts help cover these services. My question is: even if they do have a valid equity point how does renegotiating the funding benefit the people of Lawrence or the tax payer? It seems these programs are not designed have a positive impact on this city's budgetary problems, but instead are just a superficial public display meant to illustrate and remind us of the dire financial situation our city government is in. I am all for finding new streams of revenues, and to take a hard line approach to the city's expenses. I also think it may be valuable to look for new efficiencies and a close examination of budgetary outlays. I don't think any of the above are going to provide any real, tangible benefit and they may do more harm than they do good.What do you think?For the sake of disclosure I have never been to a Lawrence pool [1]: http://www2.ljworld.com/news/2007/aug... [2]: http://www2.ljworld.com/news/2007/aug... [3]: http://www.lawrenceks.org/budget2007/cm_rec_budget/2006%20Comparison%20Info%206-20-06.pdf [4]: http://www2.ljworld.com/news/2007/may... [5]: http://www2.ljworld.com/news/2007/aug... [6]: http://www2.ljworld.com/news/2007/sep...