Archive for April, 2011
Primer for getting a project deal done in Tucson:
– Only build in years when a majority of the Dem Council members are up for election
– Make liberal use of the word “sustainable” in both written and verbal presentations
– Set aside a “payola” line in your project budget for Neighborhood Associations and select non-profits
– Buy an extra acre in order to install sufficient bike racks to accommodate an entire Chinese province
– If successful, break ground immediately before the “..but I/My group wasn’t consulted” season comes
– Bonus points for the art of the “no-build” project, where you still get paid for doing nothing – most commonly seen associated with Rio Nuevo
PHOENIX - Arizona is expected to finally begin adding jobs this year for the first time in four years.
That is, everywhere but Pima County.
Economists from the state Commerce Department predict that the number of people working in Arizona by the end of the year will be 17,300 more than in January. That’s an increase of 0.7 percent.
While that does not seem like much, it is a big improvement from last year when the state lost 51,900 jobs. And two years ago 190,300 people found themselves out of work.
But Pima County’s employment is predicted to be flat, with no net growth this year, said Aruna Murthy, the agency’s director of economic analysis.
And next year, when Murthy figures state employment will rise another 1.4 percent over 2011 levels, Pima County will add only 2,700 jobs for an increase of eight-tenths of 1 percent.
A couple of factors appear to be at work, she said.
One is that while manufacturing employment is expected to increase, there is an exception in aerospace, a dominant industry in Tucson.
“We have seen in recent years there have been cutbacks in aerospace because of cuts in certain federal programs. That’s one of the reasons why in Tucson you’re not seeing as much gain,” Murthy said.
Aerospace makes up 3.5 percent of the total Pima County workforce. For the rest of the state, the industry amounts to less than nine-tenths of 1 percent.
Complicating matters, Murthy said, is that some aerospace projects are being outsourced to Mexico and other countries.
The other weak element in Tucson’s economy is the leisure and hospitality sector. While it is expected to grow by 3.1 percent statewide this year, Murthy is predicting a 0.2 percent drop in Pima County. She said some of that is because the Tucson economy remains weak, meaning people are not going out to eat as much.
And agency economists say there could be something else: The Major League Baseball teams that had conducted their spring training here have left, meaning fewer people are making trips to Southern Arizona.
Statewide, Murthy predicted that by the end of 2012 there will be nearly 2.43 million Arizonans with jobs. But that still will leave total state employment 284,000 below what it was at the peak in December 2007.
Arizonans should not expect to hit that top number again for some time.
“Most of the growth in Arizona came from the construction industry,” she said. “And it came from people moving to Arizona.”
Since then, home values nationwide have plummeted and many homeowners find themselves “underwater” on their mortgages, owing more than the houses are worth.
“They’re essentially not able to move,” and that brings migration to Arizona from other states to a virtual halt, Murthy said.
That is why she is figuring that construction employment will drop another 3,300 this year, to just 107,800. That compares to 247,500 at its peak.
Other sectors of the economy not expected to add jobs this year include information services and professional and business services. Murthy also predicts that state and local governments will continue to shed workers.
There are signs that things will improve. “Right now we are observing a weaker dollar. This weak dollar is actually promoting international tourism in the state.”
She said the result is that over the next two years the leisure and hospitality industry statewide will add 17,400 jobs.
Similarly, she said the weaker dollar helps promote exports. That will increase not only manufacturing employment but also wholesale sales and the need for workers in trucking and shipping.
One of the biggest areas of job gains for Arizona continues to be private education and health care, where Murthy predicts the state will add another 22,300 jobs in the next two years.
This sector includes not only doctors, nurses and other health-care workers but also employees at private colleges and universities. While all other segments of the economy were shrinking during the last three years, these employers continued to add workers.
Murthy said enrollment at private colleges tends to go up when the economy is weak, as people look for new skills. Conversely, when the economy improves, people do not go back to school.
“But our unemployment rate in Arizona is still quite high,” she said, with the latest figures statewide still at 9.5 percent.
The economist’s general optimism about job growth is tempered by other factors. One is the rising price of oil. Most immediately, the more people must spend on gasoline, the less they have for other things. And Murthy warned of a “double whammy” because those higher energy costs also boost food prices.
Also, the Japanese tsunami have affected the supply chain, potentially affecting manufacturing in Arizona. And there is no particular upside for Arizona from the problems in Japan that could benefit Arizona electronics manufacturers. That’s because the Japanese mainly make memory chips; what Arizona produces are processors.
Percentage change in employment
(negative numbers in parentheses)
2008 2009 2010 2011* 2012*
Total state (2.1%) (7.3%) (2.1%) 0.7% 1.4%
Phoenix metro+ (2.5%) (7.9%) (2.1%) 0.9% 1.6%
Tucson metro (1.0%) (5.2%) (2.3%) 0.0% 0.8%
+ Phoenix metro is Maricopa and Pinal counties * Projected
Components of projected job growth for 2011
(negative numbers in parentheses)
Rest of Area Statewide Phoenix Tucson state
Total job growth 0.7% 0.9% 0.0% 0.6%
Manufacturing 1.3% 1.6% (0.9%) 2.8%
Natural resources & mining 2.0% 0.0% 6.0% 1.8%
Construction (3.0%) (3.8%) (0.1%) (1.0%)
Trade, transportation, utilities 1.4% 1.4% 1.2% 1.7%
Information (0.9%) (0.9%) (5.0%) 2.9%
Finance 0.0% 0.3% (0.9%) (2.8%)
Professional & business services (0.7%) (0.7%) (0.7%) (0.3%)
Education & health services 3.6% 4.7% 1.1% 1.6%
Leisure & hospitality 3.1% 3.3% (0.2%) 5.0%
Other services (1.9%) (2.6%) (0.4%) 0.5%
Government (0.9%) (0.6%) (0.6%) (1.9%)
SOURCE: Arizona Commerce Department
Reagan inherited a economic mess after Carter and lost big in his first mid term elections as President. Reagan put in stability factors into the economy, challenged the size of government (air traffic controllers strike comes to mind) and let the business community know that it’s time to invest and hire.
Obama passes a massive health care bill that doesn’t change any cost structures and sends a shock wave of uncertainty through the entire health sector which makes up 20% of our economy. He threatens and flirts with cap and trade. He passes sweeping changes to the banking world that the big banks can maneuver but the small regional banks decide to lock down.
The rebound from the depths of 2008 and 2009 can be directly attributed to massive government spending. The credit card has been racked up and we are nearing $14 trillion in debt – equal to our total GDP – Greece anyone? Now that the debt ceiling has been reached what next? Is it time for stability?
How is Obama doing?
You couldn’t make this stuff up. The Tucson governments management of Rio Nuevo will go down in the history books as one of the biggest boondoggles in Arizona history. Who else could spend $230 million and have little to nothing to show for it. In an effort to put a layer of public oversight Councilman Cunningham raised a motion to have the City Council approve change orders on projects over $1 million. I’m not sure most of the people on the council outside of Steve K and Cunningham actually know what a change order is but lets go along for now.
The move to take the change order process away from the bureaucrats is a threat to the power of the bureaucracy. After all the staff knows all and the council is only supposed to set policy. The problem is that the all knowing staff is hampering the councils chances of reelection because of all the insane decisions.
Everyone in the design and construction world knows that you bid Tucson projects low and make your money on the change orders. O’Dell chronicled two big fat juicy mess ups in the article:
Those projects include the Fourth Avenue Underpass, where the cost jumped from $31 million to $46 million; the Cushing Street Bridge, which has been beset by delays, cost overruns and bidding problems; and the Scott Avenue and Downtown Infrastructure Project, which ran at least $3 million over budget.
The Scott Avenue contract was originally awarded as a design contract of less than $600,000. It jumped to more than $9 million through change orders.
The fourth project, the proposed convention center hotel – which cost taxpayers $18 million in design before it was scrapped – also featured numerous change orders. City Attorney Mike Rankin said the council could be notified of the change orders, but change orders could not come back for council votes because the City Charter gives authority over the procurement process to the city procurement director.
The million dollar quote comes from Councilwoman Scott:
Councilwoman Shirley Scott said the move was tantamount to micromanagement. “We have a national-award-winning staff here,” she said, adding the council shouldn’t be watching every step.
Keep telling yourself that Shirley. Your national award winning staff may just cost you an election. Who’s the only council person that has been in office since Rio Nuevo’s inception in 1999?
Translation: If you don’t approve to tax yourself more to support an inept (and possibly corrupt) municipality, kiss off!
City may cut, end furlough days for some
Rob O’Dell Arizona Daily Star Arizona Daily Star
Posted: Monday, April 25, 2011 12:00 am
To appease unions upset at the city’s ongoing budget cuts, the City Council on Tuesday will consider ending furloughs for some employees and halving the furloughs for most employees if the economy improves.
The city has had unpaid furloughs for two years, and will continue them for the fiscal year that begins July 1. For next year, employees again were facing nine furlough days, which constitutes 3.5 percent of their salaries.
Union officials, including those in the American Federation of State, County and Municipal Employees, have urged for months to end furloughs for those employees in enterprise departments such as Tucson Water and Environmental Services. Union officials also want to end furloughs for any city employee who is funded with grant money from the state or the federal government.
Top city officials had been hesitant to agree, in part because eliminating furlough for some departments and not others can raise issues of equitable treatment. The issue is particularly problematic with grant funding because employees in the same departments could be paid through different funding sources.
But the council will consider a new plan that guarantees employees paid by the general fund and Tucson Water workers will have only five furlough days. They would need to be taken between July and December. The remaining four furlough days could be waived if the economy improves and the city’s budget is in better condition at midyear.
Employees in Environmental Services and those who are funded by grants could see their furloughs end by July and have no furloughs next year, said City Finance Director Kelly Gottschalk. The city will still have to work on the employee-equity issue for grant-funded employees, she added.
For example, more than 50 police officer positions are grant-funded, but the city doesn’t want to force officers not funded by the grant to take furloughs, while treating those funded by the grant differently, Gottschalk said.
“We’ll look at grant-funded employees grant by grant,” Gottschalk said.
The unions originally had sought an increase in the furloughs in early 2010 as a way to stave off massive city layoffs at the height of the city’s budget crisis.
Michael Coiro, the executive director of AFSCME Local 449, said he’s happy about ending the furloughs in Environmental Services and grant-funded positions, as well as the possibility employees paid out of the city general fund could have their furloughs nearly halved.
But he said he won’t accept that the furloughs for Tucson Water remain. He said city leaders have been hesitant to reduce those employees’ furloughs because they don’t want water users to pay more.
Coiro said city residents turned down a request to raise the city sales tax to pay for services, so he isn’t concerned about that.
“The users denied the tax,” Coiro said. “My heart is not bleeding for the citizens. My heart is bleeding for the employees.”
A Tucson-based environmental group is part of an effort to protect more plants and animals.
The government says their efforts are actually hurting the process.
On this 41st anniversary of the establishment of Earth Day, wildlife that could be on the way to extinction is facing a new threat.
It’s a backlog of plants and animals waiting to be declared endangered.
Two key players are blaming each other.
On one hand, the environmentalists want the government to work harder.
On the other hand, the government is accusing the environmentalists of clogging the system.
In Arizona, there are nearly 60 species waiting to be put on the endangered species list.
Each one has to go through a long process.
The U.S. Fish and Wildlife Service makes the decision on what species make the list.
It says the long process is being paralyzed by the piles and piles of new petitions seeking protection for other species that are possibly endangered.
“What we’re required to do is divert our limited employee resources and time to addressing those petitions, rather than moving the process forward,” says Jeff Humphrey, spokesman for the U.S. Fish & Wildlife Service in Arizona.
Kieran Suckling, Center for Biological Diversity executive director, sees it differently.
“Well, that’s government essentially saying we’re so busy doing our job, we can’t do our job.”
The Tucson-based Center says its many petitions to protect plants and animals are not the problem.
“The problem is they’re not asking Congress for enough money to do the work that needs to be done.”
Humphrey says the money is not sufficient to keep up with the petitions, and there’s something else too.
“I don’t know that it’s anyone’s fault. I think a lot of it is attributable to a number of new threats as well as broad threats, climate change being the predominant one,” Humphrey says.
The government’s solution is not what environmental groups say they want to see.
Suckling says, “Obama Administration is asking Congress to essentially limit the amount of money it can spend on protecting new species under the Endangered Species Act which, again, is just ridiculous.”
Both sides say they are talking with each other.
“To see if there’s a mechanism by which we can prioritize what organisms they want to have added to the endangered species list,” Humphrey says.
Suckling says, “We’re in very protracted negotiations with the government of coming up with a five or seven year plan in which they will commit to actually addressing this backlog of hundreds of species which are not protected.”
Suckling says if his organization sees progress, it will step back and give the Fish and Wildlife Service some breathing room.
Copyright 2011 KOLD. All rights reserved.
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