Nick's Council Connection (23June2014)

Council Meeting Date: June 23, 2014DSCN8868.JPG

Council Meeting Location: City Hall, 220 Clay St, Cedar Falls, IA 50613

I cover the GCVA, National Flood Insurance (the good and philosophical), Bruce Sorensen and lemonade stands.

- Committee of the Whole (6:00pm, Mayor's Conference Room, ELECTRONIC AGENDA)-

1) Semi-annually, the Greater Cedar Valley Alliance (GCVA) reports on economic activities of Cedar Falls and, more broadly, GVCA.pngthe Cedar Valley. GCVA representatives will discuss external marketing, business growth, community development and TechWorks. Cedar Falls is an 'investor' in the GCVA at $25,000/year. The city also pays incentive bonuses for specific development criteria up to $25,000. The GCVA coordinates marketing, lead generation, business support and community development. For Cedar Falls, the GCVA delivers a lot of value for 25K. This immensely valuable update helps our staff and elected leadership gauge the return on investment. More importantly, its an opportunity to build our partnership with GCVA professionals to encourage tax-base growth, business development, job creation and workforce development in our community.

2) National Flood Insurance Program (NFIP): First the good news. Flood insurance purchasers in Cedar Falls will receive up to a 25% discount on their flood insurance premiums. This is because we achieved a ranking of "5" in the NFIP's Community Rating System. This stellar rating is based on our planning and mitigation efforts ranging from our regulatory measures to flood preparedness communications. On a $140,000 dollar house, this lowers the premium by $391, from $1,564 to $1,173.

nfiplogo.jpgAnd now, my reflections on the NFIP. Since its inception in 1968 replacing most private flood insurance, the NFIP has ironically contributed to its own problem - that is, subsidizing development in flood-prone areas only to create a massive taxpayer liability.  By shifting insurance costs from the private marketplace to public insurance, the number of buildings in the 100-yr floodplain has doubled, no doubt enabled by cheap insurance subsidized by taxpayers. Private companies have an incentive to stay in business - that means charging a fair premium to attract customers while making money to attract investors. When risk is nationalized, the program no longer has to operate according to market fundamentals, at least not as long as the program has the full faith and credit of the US government behind it. In 2012, Congress passed legislation and increased premiums to shore up the $20 billion dollar sink hole. Not surprisingly, it is now offering premium discounts to make flood plain insurance more affordable. Any contradictions here? Insurance parallels? I'm all for allowing people to live where they want to live, but the full costs for insuring risk should be born by those who choose to buy the product. A competitive market should set the premium price. 

-Regular Council Meeting (7:00pm, Council Chamber, ELECTRONIC AGENDA)-

The council meeting is dominated by ordinary business. Quickly... the Recreation Center's painting, flooring and print shop conversion will be delayed as all proposals were over the Capital Improvement Program budget, we pass for the final reading a collection of ordinances to finish the city's major reorganization, we accept 13 mayoral re-appointments for city board and commissions, we approve a contract with the Cedar Bend Humane Society for certain animal control functions, among other items.

New Business - Resolution Calendar 

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G.2.b) Bruce Sorensen, long-time Public Works director, is set to retire at the end of the week. Bruce has been tremendous asset to the city, it is only fitting that we name the new Public Works administrative offices after him. There is an accompanying resolution here, that tells more of the backstory and impressive contributions. He will be missed.

 -Nick's Briefs-

The Proverbial Lemonade Case Study - many have taken up the belief that government creates jobs. The incumbent political party is always predicted to fair poorly when the economy is down, as if Congress and the President self-direct the entire economy.  That would be central planning and thankfully, much of our economy still operates on free market principles.  More often than not, our regulatory framework impedes job creation. Businesses that are subject to regulation tend to benefit from it most - PAC dollars at work. Locally, you need not look far into our ordinances to realize that even here, in Cedar Falls, IA, the forces of government are at work to impede innovation and free markets.

Saturday, June 14th, marked Lemonade Day. Great community organizations came together to sponsor little entrepreneurs where 5 young teams made business plans and sold lemonade on the idyllic sidewalks of downtown Cedar Falls. By all accounts, it was a major success. The young entrepreneurs raised nearly $1000 for the Knock Out Cancer charity drive.

I am very reluctant to say it, but it is highly likely that the full operation was illegal. I point this out for the sake of absurdity; this isn't a call for enforcement. Refreshment stands on public ROW (sidewalks or parking areas) require a city 'refreshment stand permit'. This requires approval from the Black Hawk County Health Department and City Council. The applicant must also contact their insurance provider naming the City of Cedar Falls as an additional insured. I did not see permits go through council so I can only surmise that the kids were bootlegging lemonade.

What is the lesson here? 

We need to consider upgrading the little entrepreneur curriculum. First, this is an opportunity to demonstrate the realities that entrepreneurs face every day whereby the assumption should be... everything could be illegal, so you better check. Secondly, it is an opportune time to illustrate government's unnecessarily interference with entrepreneurship and free markets. The program should also employ a governmental compliance officer and general counsel, just to be safe. 

The police are also put in an uncomfortable position because they must both judge and enforce. To willingly ignore is to undermine every other ordinance on our books. Selective application is discriminatory (cute kids are not above the law). It is unfortunate that we put our public safety officers in this preventable predicament.

As it is, the event was a big success and to the best of my knowledge, no child was arrested. We should just hush up and carry-on then.


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