Weathering the Recession

Many economists suggest that the depressed state of the U.S. economy is not going to get much better for several years--maybe out to the 2014-2016 time frame. Most economists believe the economy will only get better once the U.S. starts to create more jobs. Jobs that affect our local economy are jobs that are created locally. Local jobs are created by local businesses. A strong local business community has a lot to do with the health of a community. So I ask the following question:

When is $1 more than a dollar? The answer is when you spend it in your local community.

Often your dollar, spent locally, turns over in the community about six times. Each time after the initial expenditure, some of the money in the turn over remains in the community as well. The benefit to the community is the amount of money that is kept in the community. In the six-turnover scenario, the equivalent of about $1.65 for every dollar spent remains in the community. The total impact of a dollar produced or spent in a community is measured with a multiplier. In this case the multiplier is a positive 1.65. Negative multipliers are also possible. Say you go outside your community and spend that same dollar for the same goods or services you could have spent in your community. That has a negative multiplier effect for your home community (-1.65).

Naturally, it isn’t as simple as that. Different economic sectors and different scenarios have different multipliers, and there are different employment multipliers for different sectors as well.

Let’s take a look at an example: Retailer C is coming to Dacula. They plan to build a nice building, and provide employment for about 30 workers. These will be new jobs for Dacula. Can we estimate what kind of economic impact this will have on Dacula?

Here are some assumptions. The building will cost about $500,000 and the yearly payroll will be about $550,000. Retailer C expects to have yearly sales of $1,000,0000.

2.28 is a well-established North Carolina State University multiplier for local construction. 35.9 is a well-established multiplier for new employment as a result of construction spending. So for the one time construction of Retailer C’s new store, we might expect one time new spending in the community to be about 2.28 x 500000 or $1,140,000, and new community employment to be around 35.9 x .5 = 18 new construction jobs in the community from this initial investment. If we use our guesstimate multiplier of 1.65, we can determine that Retailer C’s sales will result in keeping $1,650,000 circulating through the local community. North Carolina State University uses a multiplier of 2.04 for retailers. Using that multiplier (2.04 x $1,000,000) we calculate a figure of $2,040,000.

What’s the estimate?

Results	Money in Community	Community Employment
Initial construction	$1,140,000	18
Ongoing operations	$2,040,000	30

What can be wrong with our economic forecast? Well, the mulitpliers may be out of kilter. Estimated sales may be too little or too much. The business may fail. We haven’t included the effect of new employees moving to the community, buying new homes or renting, the effect of their wages in the community.

Lots can be wrong with economic forecasts, including the general economy of the country. But it’s better to be on the positive side of the multiplier formulas than on the negative side. The moral of the story is "keep your money in Dacula by supporting our local businesses."

In the U.S., small business generated nearly 80 percent of new jobs in the last decade. Help us grow a community. Keep your money in Dacula by supporting our local businesses. They are the job creators.

Happy Father's Day 2011

To all you fathers out there, happy Father's Day 2011.

My father passed in 1989, yet I think of him almost every day after 22 years. Fathers are our mentors, our disciplinarians, some times our pals, and the person who is our guiding light.

Please take a moment on Sunday to tell your father how much he means to you. That may mean a phone call or a visit. Just take the time to do it personally.

I'm proud to say that I am the son of Bill Wilbanks, the best dad in the whole world. And I had the privilege of growing up in a community that provided around 400 other pseudo-dads that helped shape my world. Though I'm biased about my dad, I imagine every son and daughter has the same feeling about their father.

Oh, and don't forget your mother either!

The Continuing SDS Saga

Two years ago, I wrote about the frustrations of elective office, and detailed the then 2009 state of the Service Delivery Strategy negotiations and litigation with Gwinnett County. Since that time, the trial has come and gone, and nearly a year after the completion, Judge Barrett has still not ruled in the case. There is no Service Delivery Strategy in place, and not one on the foreseeable horizon. Soon we will be making decisions that will affect your city taxes and other matters that would be easier if this issue could be settled.

As a recapitulation, let me recount the sorry facts in this matter. There is no dispute that Gwinnett County has collected taxes from 1999-2008 in some amount ($2-20 million per year) for services not delivered to residents who live inside Cities. The Cities maintain that such collections are illegal under state law and unconstitutional.

The Cities and the County have now been working on a new SDS for more than FOUR years. There are only a few areas of inequity which include police services, planning and development and transportation services and the like. Finally mediation was ordered by the Courts. On April 9, 2009 the Cities and the County agreed to mediate the SDS on April 22, 23, 24 and May 13, 14, and 15. On April 1, 2009, service delivery strategy agreements were delivered to Gwinnett County for its review. After reviewing the County’s similar documents, the Cities responded on May 14. Gwinnett County never responded to the Cities agreement documents at all.

At the end of mediation on April 24, 2009, the Cities and the court-assigned Mediator had a clear understanding that agreements had been reached on the following matters: planning, development and zoning, fire protection and emergency medical services, police, roads, recorders court and quality of life code enforcement. All those agreements have been rejected or refinagled by Gwinnett County, and they refuse to share the numbers or formulas that would allow Cities to determine the revised effects on their property owners or, for that matter, unincorporated property owners. After all this, the County and the Cities went to trial. The facts and legal precedents were thoroughly examined during the trial, and the County and Cities await Judge Barrett’s ruling in the matters at trial. As the trial ended sanctions were imposed on the County and Cities. Neither the County nor the Cities are currently “qualified local governments.”

Why should you care about this? Answer for yourself and imagine the frustrations of this office.

Should you pay any government for services you don’t receive? Shouldn’t you expect your elected officials to respect the law and uphold it? Wouldn’t you expect that your officials would be able to sit down and work out an agreement that works well for every property owner? After all, we serve the same people. Because the parties are “unqualified”, neither is able to receive state grants, radar permit renewals, street cuts on state highways, and the like. This makes serving the citizenry more difficult. So the frustration and damage remain after FOUR years.

Makes you wonder, doesn’t it?

TIA unconstrained List Out

The unconstrained Transportation Investment Act of 2010 list of projects is out for the Atlanta Region. There are 38 pages of projects and estimated costs for the entire Atlanta region are at $22 billion. There are about 4 pages that deal with Gwinnett County. See the entire list at this web site.

Specific to the Dacula mailing area and regional counties and cities to our east and south, there are only 3 projects listed:

• Grade Separation of GA 316 at Harbins Road $23million
• Sugarloaf Extension Phase 2 from GA 316 to GA 20 $301 million
• Sugarloaf Extension Phase 3 from GA 20 to Peachtree Industrial $162 million

Major projects were omitted that would have improved regional traffic in and through Dacula:

• 4-lane Harbins Road/Dacula Road
• Replacing the bridge at Winder Highway

What is interesting is that there are 7 transit projects in the Gwinnett list that represent over $1 billion.

Mayor Bucky Johnson from Norcross and Gwinnett Chairwoman Charlotte Nash represent Gwinnett County on the Atlanta roundtable.

The unconstrained list represents over $22 billion dollars. The 10-year sales tax is imagined to raise about $8 billion. Many of the projects will be winnowed out in the process of the roundtable.

You will have to make the determination for yourself about how to vote in the referendum that will allow this 10-year tax to be collected. Are there enough projects that will affect your transportation needs to make it worthwhile to pay the tax. Will the 15% that is set aside for local counties and cities (a little less than $1 billion) be enough to sway your vote? Or will the inclusion of many transit projects woo you away from the question? Only you can make that decision.

Keep up with the list as it is winnowed down, and let our representatives know your feelings about the issue.