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INFORMATION #2 07-29-1996Toward a New Game Plan Sixty-billion dollars annually. A comprehensive reorder- ing of priorities. American business has only 10 years to make that level of investment in education and training l if it hopes to remain globally competitive. [] That's the sobering conclusion of a new book by one of America's keenest observers of international business competition. Before you say, "Not my money!" and hide your checkbook, read the real-life examples in Hedrick Smith's Rethinking America: A New Game Plan ]~om the American Innovators (Random ltouse, 1995). Smith, a Pulitzer-prize winner and for- mcr New York Times correspon- dent, argues competlingly that dur- ing thc 1980s America educated its children the way GM mass-pro~ duced its cars, but both lost their edge. Now, in an era when indus- try depends on skilled employees as never before, and yet most kids dou't go on to college, U.S. cmn- panics wilt have to do a better job developing their workforce. S~nith's long-range concern is that in 10 years America will lmve nearly four-million fewer workers aged 25 to 39 than we have today. With fewer workers, every one will have to count--literally. Smith points out that in highly industrialized Japan nearly every high sclnool student studies cal- culus. In the U.S., that figure is barely six percent. Japanese kids, with their longer school years, graduate from high school with tine equivalent of four more years of schooling than their American counterparts. According to Smith, Japanese youth and their German con- temporaries are much better prepared to step into industry with a marketable skill than nearly three-quarters of Amer- ican youth. Setting aside schools and basic educa- tion for a moment, thc answer to why most U.S. workers will have a difficult time competing is not hard to find. In the 1980s, says Smith, American industry spent some $30 billion annually on edu- cation and training, but two-thirds of that was concentrated on college-educated cmph~yces. Even then, ()ne percent of the Smith's long-range concern is that in 10 years America will have nearly four-million fewer workers aged 25 to 39 than we have today. With fewer workers, every one will have to count literally. Hedrick Smith firms accounted for 90 per- cent of thc training spending. As he did in his excellent PBS television series, Chal- lenge to Americzt, Smith enu- merates in Inis new book the ways American industry needs to patiently build for thc future--or, as he says, "how singles beat home FUllS." When Smith spoke to Minnesota Technology, Inc.'s annual diuner forum last fall, he reminded us of the monu- mental global changes that have taken place in recent years--changes to which American industry must respond. "It's not size that counts, but flexibility," hc said. "It's m)t mass, but speed. It's not robots, it's people, h's not cost, it's qual- 4 MINNESOTA TECHNOLOGY SUMMER 195;5 ity. It's not the volume of output, but reliability. It's not individual perfor- mance, it's teamwork. It's not brilliant inventions, but a flawless svstcm of pro- ducing them." He spoke of all the inventions Amer- ica has failed to capitalize on because somebody else "could produce them bet- ter.'' }te said, "It's not quick profits, but patient capital and building market share. It's not an imperial CEO, but participa- tion and power-sharing, delegating authority. It's not labor-management confrontation, it's labor-management cooperation, and.., cooperation between thc public ant{ private sector[si." In contrast to the remarks he made at our forum, Smith says relatively little in Rethinki,~g America about that last cle- ment-public-private collaboration. But viewed from where 1 sit, programs Iike ours, working with industry, are filling a gap in the marketplace serving small and medium-sized manufacturers. Results--verified by our customers--- show that Minnesota Technology, Inc., staff statcwide, cooperating with public and private partners, have effected well over $100-miltion ~vorth of positive eco- nomic impact for Minnesota during thc past three years. As Smitln notes throughout his book, there arc already home-grown examples of innovation and high performance within American schools, businesses, and government. These we can and must buildon. Buta new mindset is also needed. We're not,just competing against foreign companies, but against foreign governments and societies, too. Our challenge, as a country, is to devel- op a competitive game plan and--indi- vidually and in our factories, statehous- es, and schools--to advance that agenda here at home. If you're interested in a free copy of the highlights of IF ledrick Smith's remarks to Minnesota industry, call me at (612) 338-7722. --Jacques Koppel President, Minnesota Technology, Inc. PHOTO(;RAI~H BY BRYAN '¢,ENDLAND Skilled Workers: Will We Have Enough? Can Minnesota manufacturers hire and retain adequately skilled workc,'s? This is a question of considc,'ablc impor- tance to thc state's manufacturing sector, whose future competi- tiveness will be deter- mined largely by thc skills and technological orientation of its work- [orcc. According to the findings of a prdiminary study conducted by the University oJ' Minneso- ta at I)uluth, Center for Economic Development state-based manufacturers arc indeed experiencing workhncc problems. [See Viewpoint, page 2S, for related story.] Thc study ftmdcd lw the Northwest Area Fotmdation and Minnesota Tech- ,~,,l,,g~,lnc. mcludcda~u,~c~ ofmo~c Than 1,20~ manulacturing firms around the state. The companies were selected at random from six regions ~Northwcst, Northeast, (:tnt ral, Twin (:ides, South- west, alld ~outhcast. CompaHics were grouped according to gross revenues: small (less than 55 million), medium [55 million to $50 mil- lion), and large (greater than 550 million). Among thc survcy's t~ndiugs: · }tall thc manufac- turers surveyed statcwidc have had dit:Gculty hMng skilled workers xvithin thc past few years. ThcprobJcm is much morescvcrc medium sized companies, 73 pcrcclll which reported hMng difficulties, p.~:'cd with 57 percent of thc I,u'gc corn- panics and 42 percent ot thc small c,,mpanics. Nlanufacturcrs in thc North eastern region have had thc least trouble hiring skilled workers, with only Iht'cc companies in that pat't of thc state reporting hidng problems. · Kcta' ~' ~g sk'llcd workers a problem for thc surveyed companies. DIFFICULTY HIRING SKILLED WORKERS BY REGION No Yes Still, almost a I,m~th ~,i ti,cra said Illcv have some difficuhv holding on to skilled acute in thc N,)l'thxvcsl, where 39 J)t'l'k't'lll of thc manutacturcrs surveyed said they have bccn ad vc rsclx aft'cci cd. M cd iu m trouble hiring new skilled workers, .dso lng them (37 percent). By comparison, 23 percent of thc small ctmIp.l~lics and ~)uJv 15 pc['ccnl ~)t lilt large firms reported ~clculi~m dillicuhics. · 'l'hc lack ~1 skilled %v( )l'kCl'S ar( )LI nd l J lc state' is hU]'Ling ma]~tlJaclt[r- ing pi ()duclivity. Nearly h.df (-17 percent) t)f thc c()fnpa,fics surveyed said that dm'tivi~v has bccn adversely at'footed by a shortage of skilled labor. 'l'Jfis is espcci~d- Iv thc case with medium sized SATISFACTION WITH SKILLS OF CURRENT WORKFORCE Satisfied Dissatisfied 26 MINNESOTA TECHNOLOGY SU,',.IMI I~. L~)95 / {;L,tAI'II'-. BY l~,'.,',,ll~ S'II I'-~l ICIIT i nits, 70 percent of ~ hich indicat cd x~,,~kto, ct' related p,'oductiv ltv problems. The effect on largc- compan) productivity was not as great, though still significant at 50 percent, compared with 42 percent of thc small manufacturers. m Twcmv-nine percent of the cmn- panics surveyed said a lack of skilled workc~ has prevented them from expanding m Minnesota. Responses var- lcd (rom region to region, from a high of 35 percent in the South~vcst to a Iow of 1 fl percent in Central Minnesota. · The lack of skilled workers has been a cause for SOll10 manufacturers percent) to nlo~e part of their operations out of Minncs,,~:x. This was especially apparent among the large companies sur- veyed, 27 percent of which reported moving a portion of their busi- ness out of state. · While compalfiCs rated the basic and tech- nical skills of their cur rent workforcc relative- Iv high, interpersonal and cOlll nlUlliCat[Oll skills leave more to bc CI'S ,II'C tlUCStitming thci]' c[nl,lt~ ecs' work ethic, l)csl, i~c ~alk about lodav's workers basic sl, ills, th,'cc out ,,f four (75 perccnl) of the Millllcst~ta panics surveyed said they're satisl icd with their workers' basic skills, while 65 cent arc satisfied with technical skills. I lowcvcr, fewer than halt thc surveyed---48 percent--said they arc sat- isficd with their workers' interpersonal skills, and only 46 percent arc sa~isticd with worker commt, nica~ion skills. Twenty nine pcFccnt thc companies indica~ cd they arc dissatisticd with Ibc w{tl-k clhic among their skilled cmplo,,, cos. · Thc region was thc standout in several wo,'kt'orcc skill areas, leading thc state in compan) slttis.- faction with cnlploycc work clhic (79 percent), thinking and reasoning skills (71 percent), intcrpcrson,:l skills ((¢,~ per cent), and basic skills (SS pcrccm). ~David Hepenstal Agree Disagree Small Medium Company Size (Gross Revenues) Large Minnesola Technology Published quarterly by Minnesola Technology, Inc. 400 Mill Place I I 1 Third Avenue 5;outh Minneapolis, Minnesota 55401 (612) 3:t8-7722 Minnesota Technology, Inc. is a nonprofit corporation established to assist Minnesota companies in becoming more competitive. It is part of the state's strategy to strengthen its economy and preserve and increase jobs in Minnesota. © 1995, Minnesota Tec}mology, Inc. 15SN#1060-8281. All rights reserved. Reproduction encouraged after obtaining permission froln Minnes.ta'rechnt~logy. Reprints available. Printed in greater Minnesota. Printed with soy ink on recycled paper, 40% recycled hberll 0% post-consumer waste 1995 MINNESOTA TECHNOLOGY 1 Monday JUNE 10, 1996 ]BII 13 SS Colunm one A state of siege Costly competition to lure industry from other areas defended, assailed By Mike Meyers Star Tribune National Economics Correspondent The city of Cleveland forks over hundreds of millions of dol- lars for a new football stadium while closing I 1 schools for lack of cash. A Michigan town hands a small paper mill tax breaks that amount lo $2.4 milliou in public subsidies for each job at a plant thal employs 34 people. Minnesota delivers more than $300 million in credit to North- west Airlines and later pulls away from covenants that would have forced the airline to live up to the terms of the original deal. Mean- while, the Minnesota Twins wait in tile wings for a chance to have the public underwrite a new sta- dium. Billions of dollars in taxpayer money are spent every year on huudreds of programs designed to lure a sports franchise, an auto plant or a trucking terminal to move froln one state to another or to stay put in the face of incen- tives dangled by mayors, county supervisors and governors in neighboring communities or half a continent away. Search for jobs The defense of the bidding war between the states always is the same: jobs. Graham S. Toft, president of the Indiana Economic Develop- ment Council, made the case in favor of incentives last month at a national conference in Washing- ton, D.C. lie said they help ln-e- serve jobs in the United States in the face of incentives by foreign govermnents to lure finns to cross national borders. What's more, incentive deals have helped to raise Ihe standard of living in the Midwest and Soulh by attracting foreign investment to the United States, he said. "Without bidding lbr aud tracting foreign invesunent, espe- cially Japanese laulo plant} trans- plants, the Midwest would not only have been worse off for jobs, but have missed out on the de- monstrable effect that foreign production and manage~nent practices have had on U.S. auto firms," Toff wrote ill a paper pre- sented at the conference. But Robert Reich, tile II.S. sec- retary of labor, whose chief mis- sion is to foster employment, says it's time for a truce. At the conference in Washing- ton, sponsored by Minnesota Public Radio and the Ford Foun- dation, Reich sided with econo- mists who argue tile "economic war among the states" has pro- duced more victims than victors. Reich said government should concentrate on missions with economic payoffs that private en- terprise won't take on: educating the nation's children and build- lng roads, seaports ami airports. Spending billions of incentives as bait to attract new industries in- evitably leaves less money for fundamental government pro- grams, he said. Encourages movement Similarly, Ohio State Sen. Charles ttorn, a Republican, said of economic development pro- grams that encourage companies to jmnp from one locale to anoth- er: "This is an enormous decep- tion on the American people. These are monuments to greed." Last month, the Ohio l.egisla- ture passed a resolution calling for a national study of the cost of tile bidding wars -- no one knows the grand total -- and look for strategies to call a halt to the competition. At a Greal l.akes governors' c'onference to be hr;Id next week in Chicago, governors of Minnesota and several other states will be asked to champion similar resolutions in their legis- latures. Turn to INCENTIVES on D4 J 'om 01 Interstate competition to lure industries is defended, assailed "If one looks at the resources states are spending in this war -- moving businesses from one lo- cation to another- they're not creating new processes, they're not creating new products, they're not creating new ideas," Horn said. "They're'simply mov- ing money from the public treas- ury to the private till," Cities often are the losers, as companies are lured to suburban or rural industrial centers that FarOmise lower taxes, cheaper nd and lower labor costs, Horn said. In the end, he said, taxpay- ers in cities end up paying for the unemployed and contaminated industrial sites that are aban- doned and taxpayers in the sub- urbs get stuck with the bill for schools, roads, bridges, sewer and water lines -- all duplications of infrastructure left behind in the cities. Reich said, "Tennessee, for ex- ample, rightly celebrated when it won the competition for General Motors' huge Saturn plant, but last year, the plant's school dis- trict reported that it was 100 classrooms short of what it need- ed to meet minimum state stan- dards.'' Citing research by Arthur Roi- nick and Melvin Burstein at the Minneapolis Federal Reserve, Reich said the economic compe- tition between states is filled with ironies. Among them, business officials donating time, money or products to schools at the same time their demand for tax abate- ments and other public subsidies undermine education. Hard to succeed "So businesses may be engag- ing, perhaps unwittingly.., in a process in which with one band they are trying to improve local schools, but simultaneously the chief financial officer may be en- gaging in a bidding war which undermines the local tax base, making it more difficult for school to sticceed," Reich said. He called on politicians in competing jurisdii:tions -- cities, states or regions -- to try to en- force compacts against bidding for business relocation, lie also called on the federal govermnent to consider barring tile use of block grants to fuel state or local bidding wars. Rollick and Burstein have urged a congressional ban oil tile econonlic competition on the grounds that tile race impedes interstate commerce and, there- fore, violates the ILS. Consti- tutioo. Reich said the idea is worlh t~ing but may be bard to co- force. In the meantime, he called on business leaders lo slop raids on Ibc l)ublic treasu~ in lhe name of OCOllOnlic developulenl. "Don't enter the political thicket and start instigating these kinds of bidding wars," Reich said. "These tax abatements, these subsidies, can be Ibc mom insidious forms of corporate wel- fare because they are difficult to see at the state and local levels tlorll, the llepublican state senator from Dayton, Ohio, called the Reich speech and the Wash- ington conference the start of a national luovelnenl. "Clearly, federal action is ap- propriate,' ltorn said. "l'm not optimistic that it's that simple to politically turn this thing around. "It's going to be a process of educating politicians, business leaders and the public about what's really going oiL" ~ilN_I_I'AU L ENVIRONMENT EPA says fiver, lake quality not much improved in 3 years ASGOCIATED PRESS WASHINGTON Despite some improvements, nearly four of every 10 lakes, riv- ers and estuaries remain too poi- -luted to allow fishing or swim- ming, the Environmental Protection Agency said Thursday. The EPA said sewage, disease- causing bacteria, fertilizer, toxic metals, oil and grease were among the most frequent pollut- ants. About 37 percent of the coun- try's lakes and estuaries and 36 percent of its rivers have levels of pollution that make them "not clean enough to meet basic uses such as fishing or swimming," the report said. The EPA said runoff from agri- culture, industrial activities and urban growth are the primary causes for the pollution in lakes, rivers and estuaries. ..... The report said the findings are simqYar'to-results outlined in the agency's last study three years ago. "We are holding our own in controlling water pollution, but we need to make progress," said EPA Administrator Carol Browner. High levels of nutrients -- such as phosphates and nitrates used in fertilizers - were the most wide- ly found pollutants in lakes\and estu&ries. They can creat& a ~,!¢hain. of impacts" that lead'lO excess, ye algae and weed growth, kill fish and cause foul odors in 't q Runoff from agriculture, industrial activities and urban growth are the primary causes of pollution. waterways, the report said. The report said bacteria, usually from sewage releases, were found to be the most frequent pollutant in the nation's rivers. Another ma- jor problem stems from high lev- els of silt in rivers and lakes, smothering aquatic life, the EPA said. The report reflected water qual- ity surveys by states and other agencies covering 615,806 miles or 17 percent, of the nation's riv- ers; 17 million acres, or 42 per- cent, of the lakes; and 27,000 square miles, or 78 percent, of es- tuaries. The review was released as Vice President A1 Gore criticized Congress for cutting EPA money for enforcement and for states to improve sewer systems and water treatment facilities. Gore, visiting a water treatment plant near Washington, called safe water "the first line of defense in protecting public health" and said under the proposed cuts the EPA will be unable to improve water quality. Sen. Christopher Bond, R-Mo., chairman of the subcommittee that crafted the spending bill, ac- cused Gore of "grandstanding" and said the agency under the GOP bill would face only a 9 per- cent cut in sewage treatment mon- ey and would get more than $1.1 billion. The EPA had requested $1.6 billion to help states modern- ize treatment facilities. "We've managed to provide close to full funding for EPA at a time when the constraints on dis- cretionary spending are extraordi- nary,'' Bond said, adding that the agency's overall budget was only 4 percent below the 1995 level. Federal water pollution laws were violated by nearly one in five major facilities, because &dis- charges into lakes and streams or skirted reporting requirements, an environmental group said. ^ re- view of EPA data disclosed that 18 pcrccn! o£the nation'~ indus- . trial, municipal and federal facili- ties repeatedly violated the Clean Water Act, according to the U.S. Public Research Interest Research Group. The report covered the >eriod from Oct. 1, 1991, to Sept. 30, 1992. Mississippi River is found to hold high bacteria levels ASSOCIATED Pl°,ESS Inadequate treatment of sewage appears to be harming water qual- ity in much of the Mississippi Riv- er from Minneapolis to the Gulf of Mexico, a U.S. Geological Survey study has found. Researchers found that in many parts of the river, concentrations of fecal coliform bacteria from human and animal wastes exceed federal limits that were set to pro- tect swimmers. The high levels of bacteria, which survive only briefly in river water, are apparently due to the incomplete treatment of domestic sewage, the agency said in its re- port issued Monday. The $7 million, five-year study also shows that sewage may be diluted as much as a thousandfold after being mixed into the Missis- sippi. Bob Hirsch, chief hydrologist for the Geological Survey, said the dozens of contaminants measured in the study of the Mississippi and its tributaries "represent a report card on our cleanup efforts on the streams and rivers that drain nearly half the country." "Because this is the first evalua- tion ever attempted on this scale, it's hard to talk about trends or what areas show improvement or failure," Hirsch said. The study started in 1987, when the Geological Survey began tak- ing samples of river water from near St. Louis to the Gulf of Mexi- co. The effort was expanded in 1990 to cover the 1,928 miles of the river from Minneapolis to the Gulf. The Geological Survey, the na- tion's largest water-resources in- formation and science agency, measures water quality and quan- tity in all 50 states. Its study on the Mississippi was led by Robert Meade, a senior hydrologist. Meade stressed that he and oth- er agency scientists were deter- mined to measure the river's wa- ter quality without preconceived notions. The scientists took thousands of water and sediment samples from the river from 1987 through 1992. Mississippi, Minnesota rivers 'threatened A national environmental group Wednesday cited the Mississippi and Minnesota rivers as being among the nation's "20 most threat- ened" streams. The group, American Rivers, said the Mississippi's health is threat- ened by locks and dams, flood-control protects and pollution. It said the Minnesota is threatened by contaminated runoff and silt from farms and city streets, and by an influx of inadequately treated sewage. American Rivers, which is based in Washington, D.C., issued s'imi- ~ lar warnings about the two rivers last year. The group is involved in programs to Improve the management and water quality of both. rivers. -- Dean Rebuffonl <~ + ~ ~' T}- ; }: u ~ a ~ p r i w ~ _)tat T~;Lu~e. -~o..-f.rpol~,'k ~-~ bec ~ ]qq~ A. meansthatinstead,,fproducingaClassA · sludge, our plant would he producing a -,. akefield up the creek . ith' ,EPA bureaucracy gency's sludge rules' make no sense :~ Our city is in a difficult position. In 1994, our city was presented with two "~ On Oct. 31, Lakefield held a bid opening '.J~ r a project to expand the wastewater $ i~atment process and storage capacity of ~ Jif city's wastew,ater treatment plant. !~, Our engineer s estimate of the project }llas $851,000. The lowest bid was .~1,198,000. If you figure about $50,000 for ~.~gineering, that brings the total project to ~out $1.25 million. '~ 'Fo pay for this project, we will have to cbntribute $175,000 in sewer fund and general fund reserves and raise our base sewer rate 200 percent and our per- 1,000- Td!llons rate by 26 percent from what they - ~:~ere in March 1994, when we raised our tes the first time in anticipation of this Srroject. [~, In a normal bidding process, the City -lTOuncil can opt to reject all bids. Unfortu- nately, our council will not have this op- · *~n on this project. We, and other communities like us, are ~,cing forced into expensive wastewater construction projects by the federal Envi- ronmental Protection Agency (EPA) and its state enforcement entity, the Minnesota Pollution Control Authority (MPCA). A few years back, the EPA created new rules called the ~S03 sludge rules," which created new standards for "pathogen re- duction'' and "vector attraction reduc- tion'' As far as we know, this is not a law that was passed by any elected We quesJ~oi~ holll a body; someone at the EPA simply made some J~W wastt~wat~J~ new rules, t ~ In l. akefield's case, ourtreatmen nt forced into doing can be judged an 'this project is not only e l,e,, ive, h.t seems un- excellent performer n eded, one year and in I)uring much of the 1980s, the city plannedneed of costly for conslruction of a new Wastewater treatment renovations the plant. In 1990, lhe new jrjext° $2.6 million plant began operation. Plans for the the potential penalty would be, she facility were approved by both the EPA and couldn't tell me. l'llM~d what WOl41d ~, p(:A ~d If the l~t ~ :~V~,_~ ' the engineer's rlllJliJlil~ts ~Of tl~ ~ ru~es. I asked what would happen to us if we altered our construction project and built facilities for sludge storage only while de- ~ ~t.~t~.+r leting the new treatment process. This awards for operational excellence at our wastewater plant -- one from the MPCA, ~he other from the EPA. On one wall of our City Council's meeting area is a photo- 'gr~lph of the MPC~ commissioner present- 'iflg our mayor and our wastewater plant '61Jerator with one of these awards. The irony is that the same people who '~bre giving us a&ards one year ago will ~Bbw consider us a bandit community if we '~6 not now pursue ibis expansion project. 'We would be exposing ourselves to many &hpusands of dollars in fines if we acted 'ome~ise. Our ci~ isn't saying that the EPA's goal of cleaner sludge is wrong. Wh~,w~ ~ ~ how a ~w w~tewater ~eat-' ,~t,~P~ can be Ju~ed as being ~n~ ~~t"~he ~e~ and In need ~fl~ r~no~~ ~; We question ~~~ving to pay any price, no %~bm~, tn renovate a plato that ~Uld be just barely out of compliaucc e~n when the new 503 rules are applicd. :-" On Nov. 3, I called someone at the MP~ to ask her what the MPCA would do qbout enforcing the 503 rules against us if our City Council rejected the bids for the wastewater plant project for being too costly. She said that we wmfid still have to ~C~mply with thc rules. Wbcn I asked what Class B sludge. I told her that we could do'" that, bul our engineers projected that we couldn't be guaranteed with always meet- lng the new 503 standards for Class B sludge. Sbe said that if we tried for Class B sludge, we would have to "consistently" meet the standards for Class B sludge. I asked what the word "consistently" meant -- did it mean that we could pass eight out of 10 sample tests? She said that we'd have to be 10 out of 10 on sample testing. She then suggested that we tell our engineers to start over again with another construction option such as lime appli- cation. I said that we had been working on our current construction option since mid- I993 and had already spent over $30,000 on engineering fees alone. I said I didn't think it likely that our council would start over, but I asked her what MPCA would do if we changed options and took another two years to get to the point where we are UOYY. She said that we are ah'eady required to be in compliance with the rules now and that our current construction option is al- ready too late. When I poi~tted out that the MI'CA approved the con- strtt(:lion schedule of our ctlrrelll collstruction op- tion and then wondered how MPCA could enforce agaillst tls i! c(}nstru¢:tion schedule Ihat MI'CA bad illready approved, I didn't get much of an answer. Our City Council has until about Dec. 30' to accept a bid on our plant. At this point, I am wondering it' there is anyone out there -- elected person or not -- who has an idea on what we can do as an allernative lo accel)ting this hid. Technically, the governor runs the MPCA. Technically, our members of Con- gress create the laws thai govern the EPA. . [ a~n forced to wonder why solneone can't help us or create some sort of rea- sonabh? accommodation for wastewater plants or other costly government-man- dated projects such ;is this. After all, the Americaus with Disabilities Act (Al)A), which was ('reared by elected people, bas an exemption for public enti- ties if the costs ol ren(,valion to comply with that law create, an undue hardship, but these new "503 rules" don't even allow for that. In the end, "government" is what all of us make it. It is up to those who have the responsibility to govern to decide whether our government will be reasonable or not. We are inviting whatever elected or un- elected officials who care to respond to be reasonable with us. -- Brian Wagner, Lakefield, Minn. City coordinator. IJooking at the May I, lot)6 I~atchin report on page 65 the market benefit analysis compares commercial lots or'two acres in size, one lot served with municipal utilities and the other with private well and septic. The total lot selling price of the served lot is estimated at $261,360, while the unserved lot is $108,900 The served lot is estimated to cost a potential buyer $ ! 52,460 more. $261,360 minus $108,900 equals $152~460 Let's look at how.just this additional cost might affect the profitability of this new business. If this $152,460 is financed at 10% interest and amortized over l0 years, the $2014 monthly payment would add $24,177 per year to overhead costs. Also the added value to the property would create an additional property tax burden of $7,336 per year. The $24,177 plus $7336 property tax equal an additional $31,513 annual cost. Assuming a 10% profit margin, this business will nccd to gcncratc an additional $315,130 in annual sales to meet these costs. Assuming a 2% annual rise in the additional property tax portion, these costs will total $159,060 in 5 years, and $322,093 in l0 years. l,ooking at the Patchin report on page 47, the market benefit analysis compares industrial lots of tbur acres in size, one lot served with municipal utilities and the other with private well and septic. 'l'he total lot selling price ot'the served lot is estimated at $104,544, while the unserved lot is $55,757. The served lot is estimated to cost a potential buyer $48,787 more. $104,544 minus $ 55,757 equals $ 48,787 l,et's look at how just this additional cost might affect the profitability of this new business. If this $48,787 is financed at 10% interest and amortized over 10 years, the $644 monthly payment would add $7,736 to overhead costs. Also the added value to the property would create an additional property tax burden of $2,347 per year. The $7,736 plus $2,347 property tax equal an additional $10,083 annual cost. Assuming a 10% profit margin, this business will need to generate an additional $100,830 in annual sales to meet these costs. Assuming a 2% annual risc in the property tax portion, these costs will total $62,626 in 5 years, and $126,523 in l0 years.