Strong Towns Releases Vulnerable Cities Report

The Cents of Place, since its inception in 2007, has addressed issues of public finance on levels ranging from specific projects to macro-level economic and policy issues. On the latter, I have been immersed since January in two efforts. In the first, I am managing the Brookings Metropolitan Business Plan initiative for partners assembled in the Minneapolis Saint Paul region; I introduced this project here in January, and will be posting draft business plan content for your review and comment within the next few weeks.

In the second, I co-founded Strong Towns, an entrepreneurial nonprofit organization calling for big change in American land use, last fall with Chuck Marohn and Ben Oleson of the Community Growth Institute. We’ve been producing research, building relationships and growing networks on Facebook and Twitter over the last six months. Our message – that current land use patterns are financially unsustainable and are eroding our ability to invest in our people and places – has been attracting attention of late. See us on the newswire at Planetizen and at the Switchboard at NRDC blog, and join us in developing these ideas by following us at Facebook and Twitter.

MN-most-vulnerable  Today, we have released a report titled “Minnesota’s Most Vulnerable Cities,” which addresses the following question: If federal and state aids disappeared tomorrow, and citizens wished to maintain existing services, how large a property tax increase would be required? How sensitive are our cities to the risk (and very likely eventuality) that state and federal aids fall?

View the report here. Make comments, throw darts, suggest solutions – help us develop tools to build Strong Towns.

Donjek Project: Public-Private Partnership Moves Forward for Hornell, NY

Kudos broadcast from Donjek headquarters today to entrepreneurs Michael Bougie and Patrick Lynch, as well as Shawn Hogan, Mayor of the City of Hornell, New York. As was reported in Hornell’s local press this week, the three men have joined forces in a public-private partnership between Hornell and Proxima.us, Bougie’s and Lynch’s innovative software development firm.Prox4  

Innovation abounded when Bougie and I met earlier this year to discuss a public-private partnership plan. With roots in small towns, Bougie and Lynch are each committed to creating IT jobs in rural America. Communities benefit from professional jobs that rely on existing infrastructure, provide a career path of graduating responsibility, and generate economic activity ranging from downtown sales to housing demand. Proxima’s clients benefit from intellectual property law in place here (and not in India or other outsource locations), an educated, fluent and reliable workforce, and working without the challenge of managing a project across multiple time zones.


 

In June, Bougie and Lynch delivered the public-private partnership plan produced by Donjek to the City of Hornell. Bougie’s feedback:

“Jon was instrumental in the launch of our new company Proxima.us. Jon…effectively captured the essence of our company's message and presented them in an extremely polished finished product. The positive response to our proposal was immediate and almost overwhelming. We have been told by many development agencies that our proposal was the best they have seen in decades. Jon's efforts took our good idea, and made it a reality.”

Congratulations to the City of Hornell and to Proxima.us – I am hopeful their partnership will provide a fruitful, innovative model to other communities, both in New York State and nationally.

Donjek Tools: Advocating for Local Stimulus

School_Ren Federal and state efforts to spur creation of jobs and economic activity have dominated news in the last year. The American Recovery and Reinvestment Act of 2009 (“ARRA”) constitutes stimulus funding to states and local governments. Funding resources are made available in some cases by formula, and in others, by competitive process.

Donjek is working with school districts and cities to:
  • Identify stimulus-related funding sources that address their needs. As part of this evaluation, we also identify long-term operating costs;
  • Partner with school district and city staff to apply for those funds to be awarded on a competitive basis, and to ensure that funds awarded on a formula basis are effectively distributed;
  • Advocate for appropriations for school districts and cities at the state and federal levels. 
As described in further detail below, execution of the ARRA provisions will be large scale and necessarily complicated; as program details emerge, this expectation has been confirmed. Large municipalities are effectively pursuing these resources, and Donjek is proposing to create additional capacity in stimulus funds procurement for municipalities large and small.

Stimulus funds are, generally, to be appropriated in two ways:
  • From federal agencies to states, either for state-level investments or state distribution to local governments;
  • Directly from federal agencies to local governments or other end users.
The first tranche of stimulus funding for Minnesota school districts took the form of stabilization funds. The State of Minnesota is exchanging these dollars ($500 million) with state funds, meaning that Minnesota districts will not receive new money through this program.

School districts do have an opportunity to access a range of additional stimulus programs, including those in the following general funding categories:
  • ARRA Title I;
  • ARRA Title II;
  • Individuals with Disabilities Act (“IDEA”);
  • McKinney-Vento Act;
  • Expansion of qualified bonding authorizations;
  • Rural Community Facilities program.
Cities may also have access to stimulus funds designated for various uses, and associated with different allocation processes and mandates:
  • Broadband Access;
  • Brownfield Remediation;
  • Energy Efficiency in Public- and Private-Sector Buildings;
  • Fire and Emergency Response Staffing;
  • Highway Infrastructure;
  • Housing Finance and Retrofitting;
  • Public Building Renovation;
  • Rural Business Development;
  • Rural Community Facilities Investments;
  • Solar Cities Program.
School districts and cities are financially pressed currently. Evaluating which stimulus sources are worth pursuing in a competitive process will reduce the potential waste of chasing programs as their resources and provisions are unveiled. 

Transportation Stimulus Projects Should Reflect Modern Economy

A New York Times analysis of over 5,000 transportation-related stimulus projects released todayFour-lane rural road near Fort Ripley, MN indicates that less than half of the funds are slated for investment in metropolitan areas. The analysis suggests that these transportation investments have been selected based on formula as opposed to what the American economy of today looks like.

As I’ve recounted at the Cents of Place in the past, the nation’s 100 largest metropolitan areas:

• Use 12% of the U.S. land area;

• House and employ 65% of our population;

• Generate 78% of patent filings; and

• Create 75% of total U.S. economic activity.

The report shows that the Minneapolis-St. Paul metropolitan area, while producing 1.36% of the country’s economic activity, is the location of 0.72% of the transportation-related stimulus projects authorized. Readers will note that the seven-county metro area contains just 12% of the state’s total lane miles. So doesn’t it make sense that stimulus funds reflect lane miles?

In its most succinct form, the answer may well be no. Here’s why: The federal stimulus legislation will provide capital grants to build, renovate, and replace transportation infrastructure – but it does not fundamentally address how state and local governments will pay for maintenance and operations. Over 87% of Minnesota’s total lane miles are county, township and city streets, paid for from limited state and local sources. Overbuilding may create long-term costs that will stifle prosperity in greater Minnesota, not the reverse.

Just ask my colleague Chuck Marohn, President of the Community Growth Institute, who provides planning and zoning expertise to small towns across Minnesota. In recent weeks, Chuck has blogged extensively about how and why our current approach to locating infrastructure investments is financially unsustainable. Moreover, it undermines the quality of life in communities like Brainerd, Minnesota, where Chuck grew up.

In metropolitan areas, the higher concentration of economic activity will allow for the funding of ongoing maintenance of road, rail and other systems, which will in turn bolster the metro economy as well as the statewide economy. Future stimulus funding, and the coming debate about a new federal transportation bill, ought to be designed in this light.

Photo courtesy of Resedabear/Flickr: http://www.flickr.com/photos/resedabear/ / CC BY 2.0

Donjek Project: Public-Private Partnership Plan for Proxima.us

I am pleased to announce the launch of Donjek client Proxima.us, a software development and maintenance enterprise. Proxima’s founders, Mike Bougie and Patrick Lynch, are experienced software designers who hail from small towns, and have established Proxima to create top-quality software in rural areas of the United States. 

Proxima2 Outsourcing information technology (“IT”) services to India and elsewhere is widely assumed to be a permanent fact of life, but in fact many U.S. companies are becoming less satisfied with the costs and benefits of working internationally to fill these needs. A recent survey of chief financial officers by Information Week magazine revealed that while 79% outsourced IT work overseas last year, only 42% anticipated doing the same this year.

The benefits of reduced wages abroad have narrowed and many U.S. clients have experienced inconsistent quality of service. More important, international outsourcing exposes clients to risks to data records and intellectual property, as well as financial risks associated with currency and interest rate fluctuations.

Proxima’s service couples highly skilled and educated programmers working in rural America, with clients who desire top-quality IT assistance, personal contact in a domestic time zone, and legal protection in place under U.S. law.

Donjek’s role has been working with Proxima to develop a public-private partnership plan, illustrated above. Watch for this company’s development in Minnesota and elsewhere, as its market shifts and they create professional IT jobs in rural America.