URBAN PHILOSOPHER
Conscience Laureate

Thursday, December 30, 2010

HOW MANY HOURS IN A YEAR? The Cost of Security






The Chicago Sun-Times published one of their watchdog reports called, “The cost of public officials’ security details? “ The story pointed out that while City Clerk Miguel Del Valle chose not to have any security protection, “Four other city officials, though, do have the taxpayer-funded bodyguards. They include Mayor Daley, city Treasurer Stephanie Neely and Ald. Edward M. Burke (14th), chairman of the City Council’s Finance Committee. And the fourth? The police won’t say.” Later it was revealed that the fourth official was Louis Jordan, CEO of the Chicago Housing Authority. The story also reported that the City of Chicago’s financial records show the cost to taxpayers was at least $4.6 million last year. That number makes no sense!


I am one of the few people who question when I see numbers in a story. I don’t blithely accept them as most readers do; I try to figure out how the number was arrived at. Some might call it a mathematical sickness, I call it a curiosity.


This time, what makes the $4.6 million number so fascinating is that it is TOO BIG if one is talking about protecting ONLY FOUR people. If the city records show that $4.6 million was spent, I believe it, but the City is LYING if they claim the money was spent on protecting ONLY FOUR people. There have to be more people with security guards for the expenditure to make sense. Simply put  that figure means that the cost of security per person is $1,150,000/year or $3150.68/day!


I figured out three different scenarios of protection: in one case I assumed a salary of $50,000/year for the guard; in another, I used $200/day and in the final case, I assumed a various numbers of guards. What makes the most sense is that during the 16 “day hours,” the Mayor has three guards, Alderman Burke has two, Treasurer Neely has two and CHA Louis Jordan has one. For the eight evening hours, I took one guard away from everyone except Jordan; I left him his one guard. I arrived at the combinations in an empirical manner-- by means of observation and personal experience.




(1) HOURS IN A YEAR


8760 hours in a year/ $50K salary per shift broken down hourly


Daley—3 people- $657,000


Neely- 2 people $438,000


Jordan- 1 person- $219,000
 Burke- 2 people- $438,000


TOTAL -$1,752,000




(2) $200 PER SHIFT


4 people to be protected


Two security guards each except Jordan, Daley has three


8 people per shift


3 shifts a day


2 shifts fully staffed, night one less


16 people per day and 5 at night (one each and 2 for Daley)


7 days a week is 112 shifts


If guards earn $200/per shift


$22,400/week



TOTAL- $1, 164,800 year

(3) ANOTHER $200 PER SHIFT


16 hours in a day for 8 people


$3200 day shift


8 hours in a day for 4 people


$800 night shift


$4,000/day


TOTAL-$1,460,000

Even if we assume my salary projections are too low and the guards earn $100,000/year each, we still only get $3,504,000 being spent by the city at my highest calculation. So we are left dangling with the question, “Who is receiving protection with, at minimum, the extra million dollars?” Maybe the Sun-Times watchdogs can find out the answer to that.

Wednesday, December 29, 2010

FROM CAB DRIVERS TO BANKERS, CLOTHES MAKE THE MAN




It seems that in every futuristic movie produced, all the characters are wearing unitards.  Since we have not arrived at the year 2050 yet, companies are dealing with today's fashions in their own way.


The New York City Taxi and Limousine Commission is considering making changes in the dress code for cab drivers. The revised code is expected to be approved at a public hearing next month. Currently, tube shirts, tank tops, opened toed sandals and bathing trunks are among the banned articles of clothing and sartorial scofflaws face a $25 fine. Why is this seemingly boring information so interesting? Read on!


According to the New York City Taxi Fact Book ,NYC cabbies,42,000 of them, transport 700,000 passengers per day. During a year’s time that means 25,550,000 people ride in a taxi. In the last 14 years, inspectors wrote just 46 tickets for dress code violations, Commission Chairman David Yassky said. So since 1996, there have been almost 358 million people who have ridden in a cab in NYC, yet there have been only 46 complaint violations issued. At the $25 fine paid, it means that NYC has collected the grand sum of only $1150 dollars from unkempt cab drivers!

How insane is the Commission to hold public hearings on an issue that is obviously so meaningless once someone looks at the numbers? The Commission will spend more in holding the hearings than they can ever hope to recover in fines, especially because they are planning to relax a lot of the rules—not make them stronger! They are looking to remove specific clothing that is banned.

The new dress code will be broader in language and simply state that drivers, “must present a professional appearance.” So if the stringent dress code produced only 3 to 4 violation a year, how many will a relaxed code produce? Duh! More infringements or less? Obviously, less. So why hold hearings? I guess the Commission has nothing better to do with their time.

At the opposite end of the spectrum, Swiss Bank UBS has compiled a 43- page dress code booklet for its employees. It deals not only with fashion guidelines but hygiene and grooming as well.

I guess just telling a banker to present a professional appearance is not enough guidance because they obviously are not as smart as New York cabbies!

Some of the UBS Do's and Don'ts


Do's


For women:


• Wear your jacket buttoned.


• When sitting, the buttons should be unfastened.


• Make sure to touch up hair regrowth regularly if you color your hair.


For men:


• Store your suit on a large hanger with rounded shoulders to preserve the shape of the garment.


• Schedule barber appointments every four weeks to maintain your haircut shape.


Don'ts


• Eating garlic and onions


• Smoking or spending time in smoke-filled places


• Wearing short-sleeved shirts or cuff links


• Wearing socks that are too short, showing your skin while sitting


• Touching up perfume during or after lunch break


• Using tie knots that don't match your face and/or body shape


• Do not wash, nor ever iron your shirts yourself.

Tuesday, December 28, 2010

ECONOMICS 101



ECONOMICS 101

Good morning, students. Today we will discuss the economic law of supply and demand (S&D) and correlate that to whether admission should be charged at The Taste of Chicago.

 
The theory of S&D is very easy to understand. It is an economic model that determines that the price of something in a competitive market will vary until it reaches the point where the quantity demanded by consumers, at a particular price point, will equal the quantity supplied by the producer at that same price. That results in economic equilibrium.



The four basic laws of supply and demand are:


( source:Microeconomics By Besanko & Braeutigam)


1. If demand increases and supply remains unchanged then higher equilibrium price and unchanged quantity.


2. If demand decreases and supply remains the same then lower equilibrium price and unchanged quantity.


3. If supply increases and demand remains unchanged then lower equilibrium price and higher quantity.


4. If supply decreases and demand remains the same then higher price and lower quantity


A simple example would be pricing for a dozen eggs. If a store charges $3.00/dz. and only gets only a few customers, they lower the price to $2.50/dz. and demand increases. When consumers increase the quantity demanded at a given price, it is referred to as an increase in demand. Increased demand can be represented on the graph as the curve being shifted to the right.






If the demand decreases, then the opposite happens: a shift of the curve to the left. The quantity supplied at each price is the same as before the demand shift, reflecting the fact that the supply curve has not shifted; but the equilibrium quantity and price are different as a result of the change (shift) in demand.

 
Students, you may now take a short break as I prepare for the second part of the lecture. Please watch this very funny video about economics that will help you understand this lecture.

 For those who left the room, thank you for returning to class so promptly.


We will apply what we have just learned in a discussion about an event, The Taste of Chicago, and six other lakefront festivals. The City of Chicago has lost nearly $7 million in the past three years running these events.


In earlier years, The Taste was very successful. According to the Sun-Times, in 2008, it “generated $14.4 million in (food) ticket sales, $2.4 million in sponsorship fees and gross revenues of $17.3 million. After expenses, it showed a profit of $2.5 million. One year later, Taste lost $1.5 million after expenses. Ticket sales had dropped to $11.8 million. Sponsorship was down to $1.7 million.”

 Because Chicago is broke, Mayor Daley has changed his tune about opposition to admission fees for this free event and City Hall has issued an RFP for bids for outside companies to run the summer festivals.


The Sun-Times said, “In a question-and-answer form distributed to prospective bidders, the city was asked whether producers would be ‘allowed to charge admission to all or parts’ of Taste and six other events: Viva Chicago and Blues, Jazz, Celtic, Country and Gospel Fests.


The city replied, ‘Ideally, these festivals would remain free. But, respondents should submit responses that include recommendations on the economic model, which can include an entrance fee.’ “


Back to our supply and demand lesson. If less people are attending festivals when they are FREE, what economic model would show more people attending if they had to PAY? None that this professor can think of!


The solution to the woes of the money-losing festivals is a lesson for another day, but it is simply if expenses are more than revenue, one must cut expenses to show a profit! What a novel idea. I wonder why Chicago economists haven’t figured that out!


Class is now over. See you next week when we discuss under-funded pensions. Please read pages 50-100 of your text book.


Have a pleasant week.



Monday, December 27, 2010

SEATTLE DOES WHAT CHICAGO REFUSED TO DO!

(Advertisement that was going on buses in Seattle)

In October of this year, the Chicago Transit Authority (CTA) allowed anti-Israel ads to be posted on the sides of buses. I wrote about how upsetting and offensive they were, not only to Jews, but to anybody.

 
A few weeks later I met with CTA President Richard Rodriguez and discussed the problem and he said the CTA could not ban the ads. He issued a statement for me to post:


“I understand that there are some people who will find the ads—and other ads for that matter—offensive.


As the president of the CTA, however, I can’t judge such things according to my own personal views. The CTA is a public entity and publicly funded. It is governed by laws that protect people’s rights including the right to free speech. We’re not always in agreement with what advertisers say or promote, but in accordance with the Constitution, the advertisers have the right to say them.


In this case, there was no legal basis for the CTA to reject the ads, even though they espouse a political message that is objectionable to you and others. In the recent past the CTA rejected some potentially controversial ads on another subject and was sued. We lost that case and had to allow the ads to run.


The CTA has established guidelines for advertising on its properties. For example, ads cannot be legally obscene or portray graphic violence. They cannot be directed at inciting imminent lawless action. For testimonial type ads such as these, the CTA can require – and did require – that ads disclose the name of the organization purchasing the ads. As long as advertisements conform to the guidelines, the CTA cannot deny an advertiser’s right to run an ad.”


My friend, Cheryl Jacobs Lewin, Chicago co-chair for AFSI (Americans for a Safe Israel), who originally alerted me about the CTA ads, shared with me how Seattle handled the same problem last week with different results.


The Seattle Mideast Awareness Campaign purchased ads to be displayed on 12 buses beginning December 27 that feature the slogan, "Israeli War Crimes: Your Tax Dollars at Work." As soon as people learned that there were to be anti-Israel ads on King County Metro Transit buses, they took the same action we did in Chicago, protesting to officials, but this time they were listened to. Seattle quickly changed the bus system’s advertising policy in a matter of days.


The press release King County issued said:


“Citing the potential for disruption to transit service, King County Executive Dow Constantine today approved an interim policy from Metro Transit that calls for a halt to the acceptance of any new non-commercial advertising on King County buses. Under provisions of the previous policy, Metro officials today also rejected a proposed ad from the Seattle Mideast Awareness Campaign and the proposed response ads from two other groups.


‘The escalation of this issue from one of 12 local bus placards to a widespread and often vitriolic international debate introduces new and significant security concerns that compel reassessment,’ said Executive Constantine.



My job is to deliver essential services to the people of King County, including transit service,” he added. ‘I have consulted with federal and local law enforcement authorities who have expressed concern, in the context of this international debate, that our public transportation system could be vulnerable to disruption.



‘Metro sells advertising to raise revenues to provide transit service. Metro’s existing policy restricts advertising that can be reasonably foreseen to result in harm to, disruption of, or interference with the transportation system. Given the dramatic escalation of debate in the past few days over these proposed ads, and the submission of inflammatory response ads, there is now an unacceptable risk of harm to or disruption of service to our customers should these ads run.”


Metro expects to complete work on a permanent transit advertising policy by the end of January, for the Executive Committee to transmit to the County Council for adoption.


So instead of standing behind existing policy, Seattle changed the policy. I wonder why we never thought of that in Chicago? I will make sure the CTA knows.

Thursday, December 23, 2010

WHAT'S A SIGNATURE WORTH?


Most people do not remember that in November of 1994, I was a declared candidate in the Republican primary for Mayor of Chicago. Back then, candidates had to collect petition signatures of 2% of the citywide vote in their party's previous primary. That meant I could get on the ballot with a few thousand people committing their John Hancock to fulfill my aspiration.

I really was just kidding around when I had told some political reporters of my quest, but the Sun-Times took my candidacy seriously and wanted an interview. Once my feet were put to the fire, I had to make the logical decision to “drop out.” I found it hysterical that the newspaper thought my perceived “candidacy” was important enough to warrant a story about my leaving the race.

 
There aren’t primaries anymore in Chicago for Mayor, Treasurer, City Clerk or Aldermen. The Republicans passed a bill in Springfield in 1995 for nonpartisan elections thinking it would help them to get one of their (my) kind elected if the party affiliation were not listed on the ballot. How did that work out? There is one Republican alderman of the 50, he is not running for re-election, and there are no affiliated City office holders.


The 1995 law did not stipulate how many petition signatures are needed. How stupid were the legislators on that one? So, somehow, using legal precedent and other Illinois election laws as reference, the Board of Elections decided that 12,500 signatures are what it takes to get on the ballot. Since a candidate has to protect themselves against any invalid signatures, one needs to collect at least 25,000 to be safe.

Recently a number of law suits have been filed in federal court suing the Chicago Board of elections arguing that requiring so many signatures to get on the ballot for mayor, clerk, or treasurer is "onerous" and "restrictive" and "serves no compelling state interest." I will follow the law suits.

How does the Chicago requirement compare to New York or Los Angeles? Both cities have more residents than Chicago yet require much less. L.A. wants 500 with a $300 filing fee or 1,000 with no fee. NYC candidates for Mayor need 3,750.
 
In case of petition challenges, a candidate needs a vast number of authentic signatures on their petitions. Since people are only allowed to sign one candidate’s petition, each good name is basically priceless. With so many people running for Chicago Mayor this cycle, I am surprised that valid signatures were not being sold on Ebay to the highest bidder!

The joke is that dead people vote in Chicago elections. (I don’t know how much of a farce that really is because we know dead people ride public transportation in the Windy City. See my December 2nd blog)
 The highest price ever paid for someone’s signature on the open market was in 1991 when someone bought an Abraham Lincoln note for $748,000. Now that’s a signature I would love to see on a petition!

Wednesday, December 22, 2010

CAN YOU HOLD FOR MR. CHICO?


A few weeks ago, I wrote that I am supporting Gery Chico for Mayor of Chicago and that I would tell you why. Now is the time!

It is a scant eight weeks until the February election and we cannot let the media continue to “Rahm” Mr. Emanuel down our throats as if the job of Mayor of Chicago were an appointed position. I believe Gery is the best person for the job of improving our schools, making our streets safer, bringing more jobs to Chicago and balancing the city's budget.

Gery is a proven leader with a vision for Chicago's future. He grew up in McKinley Park and is devoted to lifting up our neighborhoods. He served as the Mayor's Chief of Staff in the early '90s, where he put more police on the street and created jobs. As President of the Chicago Public Schools, he took the schools from the worst in the nation to what Bill Clinton called a model for the nation. And more recently, as head of the Park District, he built new parks and playgrounds. In every position, Gery has improved performance, balanced budgets without increasing taxes or fees and brought disparate groups together to make the city work.

As Mayor, Gery will fight to create jobs and strengthen our economy. He'll revitalize our schools and expand community policing.

I worked with Gery when he was President of CPS, and when we went to a school to visit, the first thing he would do would be to go to a classroom and talk to the students. It did not matter if there were 10 reporters and TV cameras waiting to interview him, the children always came first!

When the phone would ring at my office and I would hear the phrase, “Can you hold for Mr. Chico?” I knew he was calling with some fresh idea for schools and a message he wanted to get out. It always excited me what our next mission would be.

He received no salary in that position; he took it because he cared about the children. If one looks what he accomplished as a VOLUNTEER, imagine what he could achieve as a FULL TIME Mayor!

Gery cannot win without building a widespread coalition – a coalition that will help him win the election in February. I will be hosting a party for him in January at Dick’s Last Resort and I hope many of you will attend and meet him. (Send me e-mail to be on the list)

If you are as passionate as I am about electing the best person for Mayor of Chicago, volunteer for the campaign (312-291-9800) —assist with office work, make phone calls, even walk the streets!

 If you want to learn more about his substantive ideas and policy positions, go to his campaign web site.

I want to wake up on the morning of February 23rd with a smile on my face knowing that Gery was elected.  And elected with your help!

Tuesday, December 21, 2010

LEAD FOOTED











The Sunday Chicago Tribune’s front page story announcing in HUGE font about, “SUBURBAN SPEED TRAPS,” was deceptive in that it lead one to believe that the drivers who were stopped for speeding did not do anything wrong. Not! In each related anecdote, the drivers admitted they were speeding!


The story starts by relating the “woeful” tale of what happened to a motorist who drove through a town in Illinois.


“David Leonhart knew Bull Valley's reputation.

For years friends and relatives had warned him that the police there hide near spots where the speed limit drops.

His confirmation came one afternoon last year. A cruiser came from out of nowhere, the officer alleging Leonhart had gone 48 in a 35-mph zone. The gray-haired retiree pleaded for a warning. He had a clean record. But he got a ticket.

The $125 fine cemented the town's reputation in his mind: ‘They're heartless.’”


How is the town heartless? Leonhart admitted that he was driving 30% faster than the posted speed limit! He was breaking the law. How was he “speed trapped?”


From the United States Census Bureau, 2010 Statistical Abstract 13,040 deaths were caused by speeding in 2007. This number does not include the thousand of people who are injured and/or maimed for life.


Speed is the quintessential traffic safety issue The U.S. Department of Transportation's Federal Highway Administration review reported in its  research on traffic speed. The summary states:


• That the evidence shows that the risk of having a crash is increased both for vehicles traveling slower than the average speed, and for those traveling above the average speed.


• That the risk of being injured increases exponentially with speeds much faster than the median speed.


• That the severity of a crash depends on the vehicle speed change at impact.


• That there is limited evidence that suggests that lower speed limits result in lower speeds on a system wide basis.


• That most crashes related to speed involve speed too fast for the conditions.


The report concludes with, “When the consequences of crashes are taken into account, the risk of being involved in an injury crash is lowest for vehicles that travel near the median speed or slower and increases exponentially for motorists traveling much faster.”


So what are Bull Valley and other towns doing to cause the Tribune to print such a disingenuous story? The story says, “Some towns have officers pose as charity solicitors, utility workers or surveyors to catch drivers.” Well, good for those cities! The motorists who are nabbed are cited for breaking the law. If an enforcement officer has to go undercover to catch them, it does not take away from the fact that they were speeding.


Speed kills! Live with it!

Monday, December 20, 2010

COME TO ME FOR THE MATH! TWO TIMES



THE NUMBERS DON’T STICK FOR VEHICLE ADVERTISING










According to the United States Census Bureau, there is an approximate world population of 6,888,639,347 people. I will call it 7 billion to make future calculations easier to figure out. McDonald’s spends about $1 billion/year on direct advertising or about 14 cents per year/per person on the planet. The hamburger chain advertises to the entire globe because their stores are so ubiquitous. So what company would be willing to spend $12/per year/per person to send out a message?

State Rep. Susana Mendoza (D-Chicago), candidate for City Clerk, has proposed selling advertising on the flip-side of the city’s vehicle stickers for $15 million. She arrived at that figure by calculating that some company would be willing to fork over $1/month for the right to have their ad on the 1.25 million windshields in the city of Chicago.


“That’s really cheap if you think about being in someone’s vehicle for 365 days. It’s a great deal and great opportunity for an advertiser,” she said. There are a number of assumptions wrong with that statement. First, as previously shown, it is not a cheap cost per person for advertising. Second, she is assuming that everybody gets into their car every day. While the sticker might be affixed to my car for 365 days a year, I only use my car about twice a week and would see the message only 100 times, not 365, which basically makes the per view advertising cost three times higher!


I think Susana is fabulous and will vote for her in her quest for the Clerk’s job, but when are people going to learn to come and ask me for advice before they start spouting numbers and embarrass themselves?


THE SKY IS FALLING!


 In October, Chicago City Inspector General Joseph Ferguson warned that Chicago's $6 billion budget would be $1 billion out of whack for years to come. I would guess more.


Mayor Daley has privatized a number of city assets during the last few years. The Chicago Skyway was leased for 99 years and the parking meters for 75. The payments for the leases brought in almost $3 billion. The Chicago Tribune reported, “Instead of using the nest egg to invest and grow, 80 percent of it is now gone, even though the leases require the city to forgo meter revenue until 2084 and Skyway revenue into the early 22nd century, presuming anybody is still driving by then.” A five-year old knows if they spend the capital there will be no money left in their piggy bank!


Laurence Msall, President of the Chicago Civic Federation said, "We entered the Great Recession with … no economic plan and grossly underfunded pensions. It will be very difficult for the next mayor to put together a balanced budget without dramatically changing the structure and method by which the city delivers services."


Smart guy that Msall. Last week he was elected Treasurer of the Chicago Area Public Affairs Group (CAPAG) where I serve on the Board. I doubt if he will have any math questions, but if he does, at least he knows where to find me and ask.

Friday, December 17, 2010

TALK ABOUT A FENCE!

Last week Chicago Aldermen held a joint Finance and Buildings Committee meeting to discuss a proposal that would make it legal for businesses to install non-lethal and non-electric security fences around their companies to protect their property. The fences would not be allowed to border on any public or residential property. I vote for zapping the would-be burglar.


The Chicago Tribune reported that the fences would be,”Powered by a solar-powered device akin to a car battery, the fences send 7,000 volt jolts every 1.3 seconds into the hands of people who touch the fences, which have never proved fatal in the states and cities that allow them, said Michael Pate, director of business development for Sentry Security Systems.” Pate also said that by comparison, a Taser delivers a 50,000-volt jolt 21 times a second. So one can easily comprehend mathematically that a zap from the fence is not going to come anywhere close to badly injuring someone.

Assistant Deputy Fire Commissioner John McNicholas testified against the fences saying they could make it tougher for fire fighters if they were on the scene of a fire and worried about getting into the property without being zapped themselves. The easy solution to that would be to give master keys to the fire department just as they have master keys to high-rise elevator systems.

Currently, electric fences are legal in Chicago, but only to secure railroad facilities. The proposal passed the committee and the full council was expected to vote on it. But the ordinance never came up at the meeting. Maybe next time.

Now if you want to talk about a fence, Israel has a new one being erected. According to the BBC, in November, “Work is beginning in Israel on a barrier along the border with Egypt, aimed at stemming the flow of illegal immigrants into the country. The barrier, including an electric fence and surveillance technology, will run for 250km (155 miles). Work on the $372m (£232m) project is expected to take up to a year.” Bulldozers were dispatched to three points along the 150-mile boundary and Israeli TV showed them clearing patches of land and digging trenches near Egyptian border posts.

The Israeli government approved the construction of the barrier in March, after months of planning and preparatory work. Prime Minister Benjamin Netanyahu has described the influx of illegal migrants across the border as a major threat to "the Jewish and democratic character of the state of Israel.

Since the proposed Chicago security fences are nothing like what Israel is erecting, what’s the big deal?

Thursday, December 16, 2010

TAKE THE $6 BILLION DOLLARS!








We know that Groupon founders turned down $6 billion from Google to buy their company. What arrogance! That is why I want everyone to remember that I have been writing for months that the Groupon model will eventually fail. When the whole system blows up a few years from now, I deserve credit for being the guru on this. Once again, I will do some math to educate you how, at some point, this pyramid scheme will implode!

To make the math easy, we will use the model that a beauty salon issues 100 Groupons that are worth $50 each. The consumer pays $25 for the certificate. That money is divided equally between Groupon and the salon. Groupon has banked $1250. All 100 people redeem their Groupons and do not buy any additional services. The consumers get $5,000 worth of services and the salon has received $1250, so they are $3750 in the hole. Because most salons split the customer revenue 50/50 with the stylist, the salon will have to book $7500 of NEW services from those 100 clients just to break even. That is most likely not going to happen. Since many Groupon deals are with salons and other small businesses, that market will soon dry up. There aren’t enough new customers, who become repeat customers,  for the business to be able to recover from the loss-leader deal! And that is why Groupon is like a pyramid scheme.

Crain’s Chicago Business wrote a story about how Navy Pier used Groupon to promote Winter Wonderfest. What happened as a result?


Navy Pier officials blame Groupon for a drop in revenue for its biggest annual festival, though they credit the daily deal site for generating more traffic.


With Winter Wonderfest ticket sales up 12% in volume, but event revenue down about 8% so far, Navy Pier officials are reconsidering whether future partnerships with Chicago-based Groupon are worthwhile.


Groupon offered half-price Winter Wonderland tickets for $9 one day in early November. Mark Thompson, senior director of marketing for the Pier, estimated some 7,500 Groupons were sold that day — a 283% increase from the same Groupon deal offered for last year’s Wonderfest.


Overall ticket sales are running 12% ahead of last year to date.


But revenue is down considerably: Wonderfest has netted $420,000, compared with $455,000 during the same period in 2009.


That’s because Navy Pier, like most Groupon clients, agreed to offer 50% off the full price and then split the proceeds 50-50 with Groupon.


As a result, Mr. Thompson said, the Pier received only $4.50 for each ticket, rather than the $18 normally charged. “


How smart does someone have to be not to realize that if you sell something for $4.50 that costs $18, it’s not going to work! It is especially stupid for limited events like Winter Wonderfest to do a promotion like this because it will not bring in any repeat customers! Groupon ONLY works if one gets new, repeat business to make up for the original revenue loss.


The Chicago Tribune wrote a story in August about Greg Gibbs, owner of Chicago Bagel Authority in Lincoln Park. He signed up for a Groupon deal-of-the-day last January. “His promotion, which cost $3 for an $8 voucher good for any menu item, sold nearly 10,000 Groupons, 10 times more than the top end of Gibbs' expectations.


After splitting 50 percent of the revenue with Groupon, a standard deal for most businesses, the shop netted about $15,000 for $80,000 worth of food. Gibbs said the promotion hasn't yet translated into additional revenue.


‘We just don't get the kind of customer that we want to come back,’ said Gibbs, who saw patrons put items back if their total exceeded $8. ‘It's a lot of people that come once for the discount, nobody tips, and they're all trying to squeeze it into the exact dollar amount.’“


The bottom line is, Groupon costs too much money per one-time new customer attraction for the business to ever recover in the long run--unless almost every new customer comes back again!  If you have a 10% profit margin and are paying 50% to get a customer who might never come back, how does a business prosper? They can’t! Groupon is like three-card Monte, looks easy, can’t win.

Wednesday, December 15, 2010

CONFUSION ABOUT ILLINOIS ONLINE SALES TAX

















Associated Press ran a story the other day  about a “new” Illinois law that, “allows people who didn't pay sales tax on items bought online, through the mail or over the phone between June 20, 2004, and the end of 2010 to pay what they owe without penalty. The tax amnesty runs from Jan. 1 through Oct. 15.” The story also said, “Illinoisans can often dodge sales taxes by shopping online, but the state is hoping to collect on those taxes next year by offering a sales tax amnesty.” This position of this statement is so wrong as to be quite ludicrous!


First, Illinois law requires online companies with an office or any kind of presence, including brick-and-mortar stores, in the state, to remit sales taxes for products delivered in Illinois. The companies must collect the tax.


Second, Illinoisans do NOT DODGE taxes by shopping on-line. It is not the buyer’s responsibility to pay sales taxes; it is the retailer’s obligation to collect them. Big difference!


Third, how can there be a NEW LAW giving a tax amnesty when no OLD LAW existed requiring the buyer to be responsible for the payment of the online sales tax.

Fourth, how is a buyer to know if an online company has an Illinois presence and should be charging a sales tax? If one is buying from Amazon, there is no information that the selling company has an Illinois location.


Fifth, how can buyers know back to June 20, 2004 what companies did not collect sales tax from them on a purchase? I can’t tell you what I bought last week, much less six years ago! If I don’t know what I owe, how is the Illinois Department of Revenue supposed to know what I owe, if anything?


The AP story concluded with, “Department of Revenue spokeswoman Sue Hofer tells the (Springfield) State Journal-Register that Illinois also plans to offer a more detailed worksheet on state income tax return forms to get taxpayers to pay up.”

Can you hear my laughter through the computer? Could anything be more stupid? Are taxpayers going to “turn themselves in” and declare they were cheating by avoiding sales taxes that were not their obligation to pay??

I just hope this blog does not make the Illinois Department of Revenue mad and I am audited for spite. I’ll let you know next year.





Tuesday, December 14, 2010

NO DIBS, NO MORE! TWO STORIES

PARKING SPACE DIBS



Because I cannot parallel park, it personally does not matter to me if someone has reserved a snow-cleaned side-street parking place with some piece of old junk. I would not be parking in that spot in the summer and won’t be parking in it during the winter. But if I could parallel park, I think any legal spot should be available for my use. No lawn chairs, boxes or other flotsam and jettison should block neighborhood parking spaces just because someone feels they can claim the spot for the reason that they cleared it previously. No dibs, no more!


Chair Free Chicago is a website and group that hopes "kindness triumphs over selfishness." The folks behind Chair Free Chicago believe that there are more people who are as frustrated by the concept of dibs as there are people who dig out parking spaces and claim them until the first thaw with a resin deck chair, cardboard box, old tires, or whatever detritus they can lay their hands on. To help further their movement, Chair Free Chicago sells fliers and signs online that can be taken as passive aggressive in tone by the odd man who's thisclose to a coronary after shoveling out a parking spot. But they feel that they're being nice in reminding those who claim dibs on parking spaces that we're all suffering through a Chicago winter together.”


At their website one can order sturdy signs to tie around trees or print their own flyer  to let people know that the area is chair-free.


The site tells us, “When it comes to saving parking spots, we believe people who are frustrated by it outnumber people who appreciate it. Chair-Free Zone signs can help communicate that sentiment. Some people are born with an extra chromosome of entitlement, and probably won’t change. For others, it’ll have them thinking twice about calling dibs on a public space (and screwing their neighbors in the process). And really, isn’t it worth a try?”


Laz Parking is the only company that “owns” parking spaces in Chicago, no citizen does—until City Council Votes differently.


PUBLIC JOBS DIBS

(From Animal Farm where some pigs are more equal than others.)








Blog follower Mike wrote me last week, “I am so disgusted. I just telephoned Toni Preckwinkle's office, (312) 603-6400, to voice my opinion of Berrios hiring his sister and son. Perhaps similar calls from your blog followers will help stop such blatant cronyism.” While I agree with Mike that it is disgusting that newly-elected Cook County Assessor Joe Berrios immediately hired his son and his sister to work for him at his new position, it is more disgusting that he was even voted into office.


By now, everyone knows that as soon as Berrios was sworn in, he hired his son Joseph “Joey’’ Berrios as a $48,000-a-year residential analyst and sister Carmen Cruz as director of taxpayer services at a yearly salary of $86,000.

When Berrios was campaigning they were many stories about his accepting donations from attorneys who appealed cases before the tax appeals review board and for having family members on the county payroll. When he was asked whether the hirings confirmed the past criticism, Berrios said: “I still won the election.’’


On WBBM 780-AM radio's "At Issue" program that aired last Sunday, newly elected Cook County Board President Preckwinkle said she is "prepared to consider" an ordinance prohibiting such hires.


Maybe the “chair” people can create a website http://www.relativefreecookcounty.com/. Nobody should have “dibs” on a public sector job, no matter who they are.

Monday, December 13, 2010

BECOMING A CHICAGO POLICE OFFICER, A VERY EXCLUSIVE CLUB TO JOIN

The acceptance rate for incoming students at Harvard University is 9% and at Yale, 9.7%. If one is not a veteran, the chance of becoming a new Chicago police officer is barely 2%. This is based on the facts that 9,600 people took the police entrance exam on Saturday and the Chicago Police Department (CPD) plans to hire between 150 and 200 new officers. One’s odds improve if they are a veteran, because CPD is reserving 20% of  the new spots for that category of applicant. One actually has a better chance of holding some sort of winning lottery ticket than being hired by CPD.

CPD sent every test applicant a memo of what was allowed to be brought to the test site at McCormick Place. The bolded words are courtesy of CPD.

“We are very much looking forward to your participation in the written examination on Saturday, December 11. As previously communicated to you, we would like to remind you of the following:

1. Any personal possessions including, but not limited to, handbags, large purses or tote bags, backpacks, briefcases, notebooks, paper, notes, reference materials, and food, should not be brought into the test site.


2. All electronic devices such as CELL PHONES, pagers, personal digital assistants (PDA), MP3 players, calculators, cameras, tape/video recorders and/or personal alarms are strictly forbidden at the test site.


3. You may bring a bottle of water for your personal use only (only clear plastic bottles up to 1-liter will be permitted).


In the event that candidates bring the possessions listed above that are not permitted in the test room, we have made arrangements for a coat check on site. There are fees associated with checking of these items and only cash is accepted:


$3.00 per coat (fur coats will be accepted, but owner will be required to sign a liability waiver)


$4.00 for other items; charged on a per item basis (such as a cell phone, purse, luggage, etc.; laptops will be accepted, but owner will be required to sign a liability waiver)

In addition, there will be bottled water and snack foods for sale inside the testing room. The fees associated with the purchase of these items range from $2.25 to $2.50. Cash and credit will be accepted. Eating will not be permitted once the exam begins.”

I was sent the memo by one of the applicants who was upset that they were being charged for checking their coats and other personal items. Since everyone will be wearing a coat in this freezing weather it means that the McCormick Place vendor who controlled the hangers collected almost $30,000 in CASH at the site. If one adds to that the fact that almost every woman would be carrying a purse and virtually everyone a cell phone, I would venture to guess that the money collected was closer to $50,000. I did not even figure in the profit on the bottled water and snack food, which would add thousands more to the till. Who gets to keep that pile of money? CASH has a funny way of disappearing in this city.

What are the odds we will ever know?



















Friday, December 10, 2010

The (Possible) Future of Cook County


Exactly one year ago, I posted a blog, "No Scandal, No Relatives On The Payroll," about the race for Cook County Board President.  At that time, Democratic candidate Toni Preckwinkle (whom I endorsed and supported) outlined her future 12-step plan called, "Compact for Change." This week, as she took office, she released a transition report.  It can be found here.

Below is what she proposed last year. Let's revisit it so Cook County taxpayers can remember what was promised and what needs to be delivered. 

Compact for Change
1. Finishing the Job on Tax Repeal I believe that to make the most of taxpayer dollars, Cook County government has an obligation to deliver good services and to do so effectively and efficiently. As Cook County Board President, I will repeal the remainder of Todd Stroger's one percent sales tax increase in conjunction with implementing responsible spending practices, eliminating wasteful programs and ensuring that the County fully captures all due income.


2. Long Range Financial Planning Cook County has not developed and implemented any long-term process to guide its operations. Due to a lack of such plans, the public is ill-served and the County continues to stumble from one fiscal crisis to the next. As Cook County Board President, I will develop and implement a formal long-term financial planning process that allows for input from the Cook County Board of Commissioners as well as members of the public. Instituting long-term financial planning will enable us to more effectively manage our resources, prioritize our spending and identify problems before they become crises so reasonable actions can be taken.


3. Fighting Corruption As Board President, I will establish an independent anti-corruption committee, run by former prosecutors, to fight corruption in Cook County. They will be given the task of reviewing all contracts - past and present - in order to weed out abuse and fraud, potentially saving the County tens of millions of dollars. We will work closely with the State's Attorney's office and the Federal level to root out corruption once and for all. Cook County government and its hiring process lack both transparency and accountability. I will eliminate political influence in the hiring process that has obstructed the efficiency of County government and strained the morale of County employees. I will implement an independent agency-by-agency "desk" audit to determine the productivity, cost and benefit of each employee.As President, I will make public all Shakman-exempt positions. I will ensure online postings of all proposals, in every stage in the process, for all of Cook County's business endeavors. Every citizen has the right to know about the County's business activities. We must end the practice of having vacant positions. The present system allows for abuse whereby money is transferred to other parts of the budget without full transparency. If a position is budgeted, then that position must be filled. If not, the position should be eliminated.


4. Economic Development and Job Creation I will work with businesses to bring new industries to the region, stimulating our economy and encouraging job creation. Additionally, in order to support a transitioning workforce, I will support critical job training that focuses on new and growing sections of the economy. Specifically, I will explore and identify employment and job training opportunities to prepare workers for emerging 21st century jobs related to sustainability, natural resource conservation and environmental-related technology. I pledge to work with the existing network of job training groups and community organizations to better understand green job creation potential, green job training programs and worker retraining. This will help ensure that Cook County has a workforce ready to meet the coming changes in the world economy. In our current economic climate, the emerging green job sectors are showing the greatest growth potential. Furthermore, even now there is a significant number of entry-level jobs in energy efficiency and renewable energy.Small business is the number one generator of jobs in any neighborhood. I will establish a working group to consider means of attracting more venture capitalists to incubate small businesses and green businesses. I will also explore additional resources to support small businesses such as apprenticeship programs, tax incentives and workshops throughout the County.


5. Rebuilding the Cook County Health Care System In order to create a solid foundation for a fiscally-sound County health system, I will push for the independent Board of Directors to be made permanent. This is the first step in reducing the political influence that has been detrimental to the efficiency and morale of those health care professionals who work so hard to provide quality care.I will work to ensure that County health services are as efficient and effective as possible by striving for three basic objectives: Correct extensive waste and duplication in order to end the bureaucratic drain on health care services.Divert mismanaged resources into high-quality preventive care.Pursue cooperative ventures to create a network of specialists. Once the County health system is operating at its highest capacity, it will serve as the foundation for a rational and cooperative public-private network that maximizes human and financial resources to provide comprehensive health care to every uninsured resident in the neighborhoods where they live. I will work closely with the Obama administration to expand coverage and reduce the number of uninsured and underinsured, through the Exchange and through expansion of Medicaid, and therefore significantly reduce the strain on the County Health System. As Cook County Board President, I will collaborate with other counties to ensure that those other counties using our health resources pay their fair share. I will continue advocating for the improvement of the Health & Hospitals System's billing practices so we can collect all federal and state funds to which it is entitled; such improvements can generate many millions of dollars.


6. Fighting Violent Crime The first priority of government is keeping people safe. As Board President I will work with municipal police departments, the County Sheriff and State’s Attorney to coordinate efforts and crack down on drugs and gang violence in our communities and keep our families safe. I will advocate increased investment in FY2011 for fighting violent crime for the State Attorney's office. I will also actively pursue federal resources to help develop and support our anti-crime programs. As President, I would pursue a county-wide partnership with CeaseFire - an initiative of the Chicago Project for Violence Prevention. This partnership between government and community-based organizations would provide a unique approach to violence reduction with a focus on street-level outreach, conflict mediation and changing of community norms to reduce violence.


7. Sentencing Reform in the Cook County Jail Cook County's chronically overcrowded criminal justice system is a drain on the County’s budget and a threat to our public safety. As Cook County Board President I will expand resources for alternatives to incarceration for non-violent offenders and provide treatment for addiction, educational classes and life skills training. This will reduce recidivism and make our county safer. The benefits of this approach are three-fold: 1) decreasing the number of people sitting in jail, 2) facilitating re-entry and job training and 3) reducing repeat offenses. I will also expand the State's Attorney's Drug Abuse Program (SADAP), which provides treatment and drug education to first-time drug offenders. I will look to expand the State's Attorney's RAP Drug School and Cook County Drug Court, which serve as pre-trial diversions of non-violent drug offenders from jail into drug treatment programs. As current demand for these services exceeds their capacity, their expansion will unclog the County's courts and free up resources that will enable the State's Attorney's office to focus on the prosecution of violent criminals.


8. Consolidating Cook County Government As Board President, I will make County government more efficient by creating a commission on consolidation, to spearhead a reduction in Cook County's current separately-elected offices. This will save tens of millions of dollars, improve accountability and make the delivery of services more efficient. I will work with the Illinois General Assembly to make this a reality.


9. Reducing the County's reliance on outside law firms Currently, Cook County spends roughly $8-9 million to hire outside lawyers to defend County employees in lawsuits. While some of these cases require outside lawyers due to inherent conflicts of interest, there are many other cases - worth millions of dollars - that can be covered by the County's legal services. Specifically, cases involving more than one County employee as defendants. Typically, one defendant will receive legal services from the State's Attorney, while the other will obtain external legal services to avoid conflicts of interest. As Cook County Board President I will support Commissioner Bridget Gainer's effort to implement and develop the Conflict Council, which is comprised of County attorneys who report to, yet operate separately from, the State's Attorney's office. The Conflict Council is dedicated solely to taking on lawsuits against the County in which there is a conflict between parties of the County. This is one way to ensure that the County is conducting its business more effectively and efficiently; the Conflict Council incurs only a fraction of the cost to pay outside firms.


10. Human Rights and Diversity It's critical to have a staff that accurately represents the diversity of the County, and my hiring process will reflect this. As President of the County Board, I will work with all communities to ensure that the concerns most affecting their community are represented. I will leave a legacy of professionalism by attracting the best and the brightest from all corners of the County. This is not just about my term in office - I want to leave a lasting legacy of talented employees for County government.I will continue to act as a strong advocate for the LGBT community. I will actively lend my voice to the push in Springfield for marriage equality.I will ensure that all providers in the county are respectful and aware of the need to recognize all families and that no one is denied access to their loved ones for any reason in an emergency.


11. Strengthening the Forest Preserve District As Cook County Board President, I pledge to re-organize the District; instilling professional management and ending the patronage that has come to characterize the Forest Preserves. Specifically, we need to address the ratio between managers and front line employees (roughly 1:2) in order to devote more people to maintaining the forest preserves. I will institute a comprehensive "desk" audit of the FPDCC to determine the productivity and efficacy of all FPDCC employees. I will make public record all Shakman-exempt employees of the FPDCC and also support the recommendations of the District's court-appointed Shakman Compliance Administrators (DCA). I will work to make the District's Human Resources Department more independent and transparent; District job applications will be more accessible, regular performance evaluations will be reinstated and best practices for personal maintenance will be instituted. As Board President I will advocate for a better use of technology to self-assess the maintenance and efficiency of each division within the FPDCC. We need to be able to analyze which sections of the forest preserves are receiving more visitors, providing educational programs and upholding ecological and maintenance standards. This increases the efficiency and accountability with which resources are allocated within the Forest Preserves. The Forest Preserves are a County treasure, providing residents with a wealth of opportunities for outdoor recreation. I want to actively pursue additional educational and recreational activities to expand the opportunities for individuals - especially our youth - to experience the Forest Preserves. I will advocate for the consolidation of the Forest Preserve Police with the Sheriff's Department and look for other areas where consolidation could maximize the efficiency of County resources. By turning over responsibility for District law enforcement to the Sheriff's Office and eliminating wasteful spending, it is estimated that the County could save taxpayers up to $8.6 million. We must increase land acquisition efforts to forestall the rapid disappearance of open space. I am in full support of funding the purchase of the 7,000 additional acres that law allows the District to have. This must be done before there is no open land left.


12. Veterans Affairs We must develop a significantly more proactive Veterans Assistance Commission. I will work with state and federal agencies to strengthen our County services to ensure our veterans connect with state and federal veterans affairs departments and social and legal aid agencies that offer services, such as job training and placement.

Thursday, December 9, 2010

London Bride is Falling Down! No, It’s Chicago.


The Chicago Transit Authority (CTA) and Northwestern University are bragging about embedded sensors in the Devon-Sheridan Bridge to measure how much the structure bends when trains pass over. Sounds good until you hear the rest of the story.


The Chicago Tribune reported last week, “Each day, thousands of CTA elevated trains operate across 564 bridges, many 80 to 100 years old.


The crumbling bridges, some inspected monthly and others every two years, pose a potential danger to CTA passengers as well as to motorists and pedestrians who pass under the viaducts. But the CTA, saddled with a backlog totaling $7 billion in unfunded capital-improvement needs, can't afford to replace bridges.


The antiquated bridges have exceeded their useful life, experts say. They remain open due, in part, to luck. The bridges were built to carry steam locomotives, which generate approximately four times the load of a moving CTA rail car, said CTA chief engineer James Harper.”


So instead of being excited that ONE bridge is being monitored for safety, we have to worry about the other 563 that aren’t! Why is the CTA proud of this?


The Tribune also reported that, “CTA officials hope over time to expand the monitoring to at least some other bridges and to add Web cameras to create a visual record, including the common problem of trucks hitting viaduct support columns and taking out pieces of concrete, or getting wedged under the crossing, which has a clearance of only 12 feet 10 inches.”


They “hope over time” to expand the monitoring system? Do we have the time to wait? Since is costs $35,000 for each system, the cost to install at every bridge would be 19,705,000 (I learned how to multiply in my honors classes in school,) and the CTA’s budget is already straining at the seams—just like the bridges! Replacement dates for the bridges remain indefinite until funding is identified, officials said.


Does CTA President Richard Rodriguez think “truthiness” when he allows CTA trains and buses to travel over bridges without worry of an accident? (For the uninformed “truthiness” is a word coined by Stephen Colbert which is a "truth" that a person claims to know intuitively "from the gut" without regard to evidence, logic, intellectual examination or facts.) The logic here supports that Chicago will have a bridge collapse, yet buses and el trains keeps rumbling on.


Bridge collapses in Minneapolis, Minn., Orovill, California, Webbers Fall, Okla, Texas' Queen Isabella Causeway, Amsterdam, N.Y., and the country’s most deadly when the Sunshine Skyway Bridge in Florida collapsed killing 35 people and the Silver Bridge collapse over the Ohio River that killed 45 people should have us in trembling in fear when driving over Chicago’s bridges.

I forgot. The CTA has no money for repairs. Maybe if we stopped the freeloading senior fares (including the dead riders) there would be some more cash for repairs.

Just like London Bridge, Chicago bridges are falling down! Or soon will be!

THE LYRICS
London Bridge is broken down,
Falling down, falling down.
London Bridge is falling down,
My fair lady.


Build it up with wood and clay,
Wood and clay, wood and clay,
Build it up with wood and clay,
My fair lady.


Wood and clay will wash away,
Wash away, wash away,
Wood and clay will wash away,
My fair lady.


Build it up with bricks and mortar,
Bricks and mortar, bricks and mortar,
Build it up with bricks and mortar,
My fair lady.


Bricks and mortar will not stay,
Will not stay, will not stay,
Bricks and mortar will not stay,
My fair lady.


Build it up with iron and steel,
Iron and steel, iron and steel,
Build it up with iron and steel,
My fair lady.


Iron and steel will bend and bow,
Bend and bow, bend and bow,
Iron and steel will bend and bow,
My fair lady.


Build it up with silver and gold,
Silver and gold, silver and gold,
Build it up with silver and gold,
My fair lady.


Silver and gold will be stolen away,
Stolen away, stolen away,
Silver and gold will be stolen away,
My fair lady.


Set a man to watch all night,
Watch all night, watch all night,
Set a man to watch all night,
My fair lady.


Suppose the man should fall asleep,
Fall asleep, fall asleep,
Suppose the man should fall asleep?
My fair lady.


Give him a pipe to smoke all night,
Smoke all night, smoke all night,
Give him a pipe to smoke all night,
My fair lady.