Posted by: bkivey | 3 April 2012

Well Intentioned Corruption

I’ve written before about the ‘soft corruption’ of Portland city government. I make the distinction between ‘hard corruption’ such as vote-buying, municipal nepotism, and graft, and the type of ideology-driven corruption present in the local metropolis. The current mayor and most of the city council tend to view tax revenue as a means to fund whatever pet project their liberal constituency finds attractive at the moment. In the past, these projects have included bike lanes, bioswales, demonstration houses, and the creation of bureaucracies of questionable value. The City Auditor has not been amused, and last year released a scathing report detailing marginally legal and extra-legal expenditures.

The latest brain zephyr from the mayor has been to use parking meter revenue to provide a loan guarantee for a privately owned biomass electric plant run by Columbia Biogas. If not used to guarantee the loan, the revenue would go to frivolous items like paving streets. As I’ve noted,  there are  nearly 60 miles of unpaved roads in Portland, most of which I’ve seen are in horrible condition. The company has argued that they should receive city help for a private enterprise because the city can save $8 million annually in avoided sewage treatment costs, and their central location in the city would “reduce truck traffic”.

This all raises some questions:

  • Why is a public entity funding a private enterprise? If the business model is so good, why can’t private investors assume the risk? If the business was a steel mill, would the city be so quick to throw public money at it?
  • Where does the $8 million in avoided cost figure come from?
  • If the plant will require garbage trucks to supply feedstock, and those trucks weren’t on the road before, how does location ‘reduce’ traffic?

It seems that Columbia Biogas has realized that a relationship with a government known for not following it’s own rules would be a PR disaster. Prior to the publication of the story, the company informed the mayor that they wouldn’t be seeking public funds for plant construction. The decision may have been hastened by a city finding that rather than $8 million in annual avoided sewage costs, the city was looking at closer to $104,000. I’d also think that the desire to remain free of the manifold interferences inherent in taking public dollars played a large part.

I don’t live in Portland, and regular instances of this kind of decision-making are a part of the reason why. While I’m happy to see that public money won’t be used for a project of uncertain viability, the outcome wasn’t due to good management on the part of the city.

Opening Day 2012

I like baseball. A lot. I look forward to Opening Day. This year, though, has been a disappointment. Opening Day was 28 March in Japan with a couple of games between the Seattle Mariners and Oakland A’s. That in itself is a problem. In the first place, few fans in America, especially on the East Coast, could watch the games. In the second place, why have Opening Day offshore? I understand that MLB wants to expand it’s market, but baseball is already huge in Japan. I can’t imagine that you’d need to build brand awareness in that country. If MLB must have an offshore Opening Day, why not central Europe, where you could possibly gain new fans, and you’d already have a built-in fan base with the American service personnel.

My other disappointment with the start of this year’s season is the ‘soft opening’ approach. A glance at the schedule over the prior weekend showed some regular games, and many more spring training contests. I much prefer the traditional approach where every team starts the season on the same day.

Wordwatch

Although I’ve been to business school, one of my pet peeves about the business community is it’s propensity for making up terms and words to make themselves appear smarter than everyone else. Business is more art than science; at it’s core it’s about relationships. This follows from the fact that humans are social animals, but it seems that at some level business people feel inferior to specialists in more concrete fields. This can sometimes lead to the invention of obtuse jargon.

I was reading an article on a transportation company describing how the use of software increased asset velocity.  Huh? I know what an asset is, and I know what velocity is, but I couldn’t see how the two were related. It seems that what the article was talking about was increased asset utilization efficiency. I have to say that I’ve come to like the term. Because velocity is a vector, the phrase packs three concepts into two words. And by defining utilization in mathematical terms, new possibilities in asset management are opened up, such as using vector calculus to find the practical limits of asset employment among competing interests. This looks interesting, and I’ll have to find out more about it.

 

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