14 Oct Creativity, innovation extend to municipalities
In 1995, I gave a luncheon speech to the Chicago Bar Association entitled “Communication Rights-of-Way: Municipal Revenue Generators for the 21st Century.” At that time, many who attended thought it was a novel idea but did not put that much faith in it. My argument was that the horse-and-buggy taxes that focused on gasoline, cigarettes, and liquor were maxed out. Municipalities would have to become more creative to seek out revenue streams that could pay for services and pensions.
This quest for new revenue streams has not diminished. In fact, it has become more critical as federal money has dried up for many programs and municipal governments, whether they are local or county governments, have gone beyond what they should in spending. No one wants to cut back.
Today, there is a lot of controversy as to what public rights-of-way (ROWs) should be used for in providing network and cable services. New network services that have to be delivered through the local fabric of ROWs should be charged accordingly.
Why? Because the value of that ROW has gone up and the path to all subscribers is through the ROW, except in the case of wireless services.
Other municipalities are looking at providing wireless network services that may provide a new revenue stream. Municipal Wi-Fi is a big buzzword in the circles of city governments, but I hope they do not overestimate what they will really get out of it as far as revenues.
New municipal revenue generators do not have to be tied to technology or network services. There are plenty of areas that can be viewed more creatively so that they look more like a profit center rather than an expense center.
The key to success in identifying new revenue generators is having someone come in with an outside perspective on the board, as well as the desire to be a catalyst for change.
Do you practice what you preach?
Yes I do. In East Dundee, Ill., I am in a unique position because I am an elected official. There are a lot of challenges for local governments in finding ways to generate a revenue stream in order to pay for day-to-day operations as well as a long-range planning process.
Some small municipalities make up for their budget shortfalls by increasing the patrolling for speeding, usually in artificially slow speed-posted roads. Instead of raising their constituents’ taxes, they figure they will make up their budget shortfall by stopping drivers like me and you.
This is another horse-and-buggy practice that basically asks for a “tribute” in order to drive through the town that goes all the way back to the Sheriff of Nottingham days. I disdain this approach because it is a lazy way to get money and a waste of highly trained police officers. Send police out to cover crime and be a little more creative in seeking real projects to generate revenue for your municipality.
Keeping up with the Joneses
My previous articles have beaten to death the basic foundation for economic development in the 21st Century: economic development equals broadband connectivity and broadband connectivity equals jobs. If you do not have a good infrastructure to attract and support businesses, you are doomed to a slow death of attrition, which leads to downtown failure. Where do you make up the sales tax revenues?
Besides working within the network infrastructure, there might be other projects that could be considered revenue generators. There are some real solid approaches that create an alternative even in public works.
The East Dundee Wastewater Treatment Center is a perfect application to discuss. Most would not look twice on this mundane project. It is strictly an expense center that is viewed by most of the “old guard” politicians in many communities as the “cost of doing business.”
What if you could also process the waste water from other communities around you? What if they would pay for the expansion of your plant? This is exactly what we did in East Dundee. It was a split decision to move forward in what I believe was our most critical vote of last year.
It is designed to filter our water as well as our neighboring community’s water before it is returned to the Fox River. We are now looking at expanding that service to other communities. Payments that come from outside the village will help pay for improvements and maintenance.
Revenue generation
The new breed of politician and municipal administrator better come into the job with an understanding of how to develop new ideas and how to redevelop mature assets and processes into revenue-generating applications.
Instead of the typical approach of “following the lead of surrounding communities,” administrators and elected officials better be more focused on being champions for positive change who can develop new strategic directions.
No one is going to run out and change their community overnight, but if you can establish just one new initiative that takes something and changes it into a revenue-producing asset, you are well on your way as to analyzing problems much differently and gaining a positive result for your community.
CARLINI-ISM: Managerial skills of rote, repetition, and routine have to be replaced with creativity, flexibility, and adaptability.
Copyright 2006 – James Carlini
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He will be the Keynote Speaker at “Justice-Media, Wireless (Wi-Fi) & You,” Oct. 21-23 in Milwaukee. Details can be found at (http://www.cfnbainnercitywireless.biz/id23.html )
Check out James Carlini’s blog at www.carliniscomments.com.
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