Wednesday, January 18, 2012


One of the top news stories this week has been the wreck of the the cruise ship Costa Concordia, which struck submerged rocks off the coast of Italy and sank. Fortunately, nearly all the passengers and crew were able to reach safety. It sounds like the one right thing the Captain did - before he cowardly scampered overboard to safety, leaving his passengers and crew behind - was to quickly steer the ship to shallower waters so that it wouldn't fully capsize, like in the movie The Poseidon Adventure. This action undoubtedly saved many lives.

But this tragedy was set up by decisions he made a long time before the hull was torn open.

I've had the opportunity to stand bridge watches on one of our Navy's ships of the line. I never saw the Captain just 'wing it' when sailing close to land, or in a narrow channel. Before leaving or entering port, or just sailing near a coast, the Captain and Navigator develop a maneuvering plan which includes waypoints and course bearings, and in doing so they pay close attention to all the depths and obstacles marked on the official nautical maps. Once underway, observations are taken continuously via radar, sonar depth finders, and visual means - even with the existence of things like GPS. Every few minutes, the actual position of the ship is plotted on official charts, which become part of the legal record of the passage. Other than maneuvers which might required to avoid other vessels, there is no deviation from the plan.

You don't kid around with this navigation stuff, whether the ship is a naval vessel, an oil tanker, or a cruise ship. Mistakes can be extraordinarily deadly and expensive.

Big ships can be surprising fast. Not only are our nuclear aircraft carriers the largest ships in the fleet, they're also the fastest. Although you won't find official confirmation, in the right sea conditions, carriers are said to be able to go over 40kts (about 45mph) - think a thousand foot long, 100,000 ton ski boat. Carriers need to be fast because the amount of weapons load an aircraft can carry when being catapulted off the flight deck is directly related to the amount of airspeed which can be generated over their wings, which is the sum of the actual windspeed while pointed into the wind, the speed of the carrier, and the terminal speed of the catapult.

But you had better not want to change course very quickly if you're sailing a carrier at flank speed. And if someone falls overboard, the carrier doesn't even try to go back and rescue the poor soul. It takes many miles of turning and a good deal of time for a carrier to return to a spot it has passed, so it's much quicker to dispatch a helicopter or one of the other ships always sailing with a carrier.

The captain of the Costa Concordia didn't think his maneuvers through very well. He clearly picked a track on which no large cruise ship had ever before sailed, and he was reportedly doing it to show off to the folks on the island they were passing. Apparently lots of cruise ship captains do this in this part of the world. Maybe this captain wanted to be the hottest of the hot-dog captains of the Mediterranean cruise industry, so he took a gamble. But even if they had seen those rocks from a mile away, it would have been too late to avoid a collision. The ship is too big and too fast. Inertia wins every time.

Our school district is like one of these big cruise ships. There has been a huge investment of talent and treasure to get us where we are. The quality of the experience our kids will have going forward will be dictated by the quality of decisions and plans made largely out of the view of the students and parents.  But once execution begins, and the kids roll into the classrooms, things happen fast, and changing course can be very difficult. There is such a thing as organizational inertia as well.

The executive team of our district produces a few key planning documents which are used to lay out the course. The longest-range plan is the 2020 program, initiated in 2006 by Superintendent Dale McVey. It sets the  general course for the school district, and gives guidance for planning and action all the way from the central office to the classroom. It should be read, reread and adjusted as necessary to make sure all stakeholders agree on the course and speed of our collective journey.

I very much enjoy reading naval history, especially of the World War II era. I'm currently reading Neptune's Inferno by James Hornfischer, which tells the story of the battles at Guadalcanal in the south Pacific. It never occurred to me before reading this that even with the sinking of many battleships at Pearl Harbor, the US Navy still had a fair number of battleships in the fleet. However, in the first couple of years of the war, battleships were not used much in the Pacific.

Why?  Because they were gas hogs (actually they burned a very thick fuel called Naval Fuel Oil). The admirals had only so much NFO available which to operate their fleet, and a limited number of tankers available to transport it to the ships, so they decided to give priority to the carriers, which were much more effective in the ship-to-ship warfare of the early years of WWII, such as the Battle of Midway.

It was a tough choice. Battleships might have lost their prima dona role in the fleet to the carriers, but when it came time to land on the beaches, the Marines very much liked having the big guns of the battleships around to pound enemy emplacements. There would be a time and place for the battleships, just not right then.

The point is that these were resource-constrained decisions the admirals had to make. They would like to have had unlimited fuel available, and been able to sail both carriers and battleships in their fleets, covering vast distances in short periods of time. But most of their fuel was coming by slow tankers from ports on the west coast of the US, and so the admirals needed to make fuel availability and fuel consumption a core part of their planning. More ships require more fuel. Faster sailing speeds consumes more fuel. Tradeoffs had to be made.

Our version of that is depicted in the Five Year Forecast. If you've been a long time reader of this blog, you know that I write about the Five Year Forecast very often. It's not because I believe the Forecast, prepared by Treasurer Brian Wilson, is the most important document in the world, or because I believe financial matters trump everything else.

It's because a school district than runs out of money is like a naval fleet that runs out of fuel: Dead in the water.

The Navy didn't have an infinite supply of fuel in WWII (or now for that matter), and we don't have an infinite supply of money. The Five Year Forecast illustrates how fast we plan to burn fuel, and helps us determine when we need to be resupplied (ask for another operating levy).

Barring some significant change in thinking, the current execution plan for 2020 shows us needing to be refueled sometime after 2014. For that to be true - for it not to be sooner - we have to limit our spending to the rate shown in the Forecast - about 1.3% growth per year. There also needs to be no further erosion of supply (eg further cutbacks of State funding).

As implied by the name, the current Five Year Forecast paints one version of our fiscal future through FY2016. It shows the spending growth rate kicking up to a little more than 4% per year starting in FY2015. The main difference versus earlier years is the assumption made as to the cost of compensation and benefits. Those costs will be driven primarily by what programs and services we want to offer, how many people we employ in the district to deliver those programs and services, and the terms of the next collective bargaining agreements with the teachers' union and the support staff's union, which will need to be renegotiated by the end of 2013.

Maybe our planned fuel consumption rate and our assumptions of the fuel resupply rate are accurate and in balance. I suspect they may not be. Both may need some adjustment, and the conversations won't be easy.

We can't wait until 2013 to start having these conversations. The captain of the Costa Concordia could have avoided this tragedy by doing better long-range planning, rather than assuming that he could make last-minute decisions if needed to avoid disaster.

We need to do the same.


  1. Paul, some ideas that should happen sooner the later.
    1. The Col. Disp. reported that one of the items on the agenda is another look at the school funding mechanism. I would like to see a committee, perhaps by the board, orrrrr perhaps under the Educate Hilliard banner.
    We need to get into some across the board changes to the property tax as the primary funding tool.
    2. It would be a good time to get a school committee to start looking at our total programming and especially as the relate to the supplementals, and some programs that can be eliminated. Otherwise the local tax burden in going to skyrocket again. I know you spoke to this in previous headers so perhaps we can get a fruitful discussion on what provides a full program while starting to eliminate some of the extras that could go to full pay to participate or eliminate the stipends.

    We have a very high end number of these supplemental positions that seem to have to have funding connected with them in the form of
    constant increases in compensation.

    Some key areas that need to be delved into.
    Many here I am sure would volunteer. Thanks

  2. Thanks Rick. I think you're 'right on course' (I'm kinda stuck of the nautical stuff for the moment).

    I don't personally have a problem with property taxes as the primary funding mechanism for schools. It brings a degree of economic stability that I think is good.

    Maybe we need to think about an income tax component, which could be an 'earned-income-only tax' which eases the burden on our senior citizens (including me!). But having too much of our funding from income taxes scares me - it's too easy to get 'used' to the revenue in boom times, and be unprepared emotionally for a downturn. A ton of community education and public education is required so have long-term health under an income tax system.

    I've long been a proponent of Impact Fees, and it might be time to roll that out again if the City of Hilliard is going to allow family friendly multifamily housing to be built in our district.

  3. Is the board of education allowed to take a public stance on the proposed 400 unit mulitfamily complex proposed? I doubt the tax revenue generated by a Giant Eagle and a GetGo will off set the cost of potentially hundreds of addition school children to the district. Will there be any kind of "official" objection to this project when it goes before the P&Z commission? Individual taxpayers in attendance will have no realistic input for the decision process, compared to the professionals representing the developer. How can a real community voice be heard?

  4. Yes, the School Board may, and has been heard on other development matters in the City of Hilliard. In particular, a couple of us are on the record having publicly addressed the City Council in regard to our objection to the TIF granted being then proposed for Schottenstein for the apartments at the corner of Roberts & Alton-Darby.

    Individual objections are not as strong a statement as a formal resolution passed by the Board, of course.

    We'll need to see the projected economics on this one, and whether or not any TIFs or other abatements will be proposed.

    By the way, I don't object categorically to the use of TIFs and abatements to attract commercial development to our community. We'd like to get 100% of the normal taxes on commercial property, but commercial developers just won't come to our community if we aren't willing to give some latitude. And we need more commercial/industrial property tax revenue.

    So you'll see us participate in some abatement deals in order to help attract new businesses. In fact, there's one of those on the agenda for this coming Monday's meeting.

    This one is for Boehringer Ingelheim Roxanne Labs, who is competing internally to win an expansion project. We'd like them to win that expansion as well, and so are agreeing (if the resolution passes) to give up 75% of the incremental property taxes for 10 years in exchange for sharing some of the incremental income taxes generated by the additional employees required.

    Under Ohio law, the City of Columbus could have just granted a 75% property tax abatement without needing any approval from the School Board (any higher abatement percentage would have however). So getting the income tax revenue share is a bonus. Assuming Boehringer is still here in 10 years, we'll start collecting the full property tax revenue then.

    By the way, Boehringer is one of the big winners as a result of the elimination of Personal Property Taxes by the Taft administration. The value of their buildings pales in comparison to the production equipment housed within. The PPT elimination was a good thing in regard to retaining and attracting manufacturing operations to Ohio, but the General Assembly as well as Governors Taft, Strickland and Kasich have all failed to make good on their promises to keep school district whole.

    The loss of this Personal Property Tax revenue has been very significant to our district, and the replacement of this revenue flow is major reason why a levy was on the ballot in Nov.

    1. I understand and agree with the discussion about the TIF's to attract new business. The newspaper article alluded to Giant Eagle only wanting to build here, though, if the additional housing was there to support it. Will the board of education formally oppose new housing and additional students, based on an inability to fund the educational resources they would require? This would be completely aside from any TIF's that may be required to attract Giant Eagle.

      And as far as a failed promise to make good on the lost revenue from the elimination of the PPT on business, what was the state supposed to do? The state faced an 8 billion dollar deficit. There simply is NO money from any source to replace it. The school board and the teachers union have to recognize that. We, the community, cannot make up that revenue loss. The school district must learn to live with less, as far as compensation and benefits. There is no revenue stream left to tap.

    2. There is that connection between retail development and residential development, and I personally think it's good city planning to create residential/retail clusters so as to make walking to shop a more practical alternative for residents.

      Of course, it's even better to have non-retail commercial development, like the Boehringer manufacturing facility. For these kinds of operations, its not so much nearby shoppers which is the driver, but rather access to utility trunks and the freeways. We're in good shape in that dimension as well.

      The last I heard, CSX is going to spend a fair chunk of change to upgrade their intermodal facility in the old Buckeye Yard. That means containers can be shipped all the way from the Hilliard to the east coast on double-stack trains, one of the cheapest forms of transportation in the world. I hope that attracts more manufacturing to the school district, and is not just used as a drop-off point for more imported retail goods.

    3. Paul, you know I admire all that you stand for and work towards....but you still haven't directly answered my question. Will the school board take a direct stand against additional housing within the school district boundaries, based on struggles to fund current student population numbers? Isn't this the other side of the financial solvency coin... to attract business AND to control increases in housing in the district? Isn't this what has been often discussed within the community as far as controlling education funding struggles? You yourself have previously detailed how additional housing does not generate enough property tax to support increased student numbers. Is the board going to "man up" and do the right thing or is this out of the realm of what they're willing to do.....the really hard stuff.

    4. Respectfully, I can't answer your question because I can't speak for the other Board members. However, as an individual member, I will certainly strive to have this be point of discussion both within the School Board and with the members of the City Council.

      What can really help is for members of the community who understand the issue - like you - to make your feelings known to the School Board and City Council as well.

      That's been my main mission since starting this blog 5 years ago - to educate and motivate the folks in our community so they'll engage in the governance of our community. I can do only so much as a single School Board member. But the voices of many can truly demand change.