Friday, February 12, 2010

Correction

I erred in my previous post by taking a narrow view of business response to Colorado Springs' financial disaster. Stephen Bartolin, Jr., who runs the Broadmoor resort, e-mailed the Springs mayor and city councilors with budget saving recommendations. Cutting payroll was his top priority:
* Contract out everything that is practical with sharply negotiated pricing which gets you out from under the overtime, benefit and pension costs paid to City employees.

* Restructure your benefit and retirement plans to something more comparable to what is available in the private sector.

More specifically:

* 70% payroll cost – No matter what business you are in, for profit or non-profit, the game is pretty much over if you are running a 70% payroll cost. We do approximately half the revenue the City does and we run a 30% payroll cost with 1800 plus employees, near the same number as the City.

* Per employee cost of $89,196 – It is doubtful you can find any private employer for 500 or more people in the state of Colorado or practically the nation that has a per employee payroll cost that high. Our per employee cost is $24,460, which includes seasonal and part-time people which we use a great deal as there are no benefit costs associated with these.

* The number of people it takes to get things done -

It's called class warfare. Bartolin presents a recipe for America as a third world country. His e-mailed advice would create a caste of have nots useful for keeping the city functioning but financially unable to enter the Broadmoor's lobby. If a couple wanted a golf weekend getaway in early May, Bartolin's Broadmoor would charge them $560 for two nights in a standard room plus $155 for each round of golf on the Mountain or West courses. East Course greens fees are higher: $195. Eating is also expensive. The Penrose Room offers a piker's prixe fixe 3-course meal at $72 per person not including wine. Real gastronomes might pick the chef's tasting menu plus sommelier's wine selections for $158 each. Sunday brunch is $38 a head. The weekend would cost at least $1400 before tips and taxes. Who can afford this? Certainly not Bartolin's ideally impoverished city workers.

Even now, after the Wall Street grifters flushed everyone's investments down the toilet, Bartolin damns defined-benefit pensions as budget busters and advocates that Colorado Springs, "Develop a generous matching 401K plan and have people take responsibility for their own retirement planning." Who gets to take responsibility for what? Imagine someone who followed Bartolin's prescription for a self-directed, defined-contribution retirement plan and now approaches retirement age. Let's assume the best. She paid in the maximum allowed each year and received generous employer contributions. She invested wisely, had the wisdom to switch from stocks to cash right at the market's peak, and is ready to retire with a one-million-dollar 401(k) account. Now what? A 10-year treasury bond pays about 3 1/2% interest, or $31,500 per year on a million dollar investment. That's not much. Shorter term paper is at 1% or less. She just might need a seasonal or part-time job at the Broadmoor to supplement the retirement income. This hypothetical woman did everything right -- as Bartolin sees it -- but ends up screwed.

Bartolin and his cohort are too busy pushing America into the 19th century to observe the obvious. Their ideas are awful. They don't work. The supposedly no nonsense, tough guy, uberpractical businessmen are motivated entirely by right wing anti-labor zealotry. They run from the facts. Everything they say and write oozes self-interest. Here is another one of Bartolin's recommendations: It occurs to me Police Officers and Firefighters who risk their lives for this community should be excluded from the ideas being advanced. And, it occurs to me that police and fire protection are the city services most important to the Broadmoor. Hotel guests don't care about Colorado Springs parks, buses, libraries, and swimming pools. Pot holes and dark street lamps probably don't matter either. The hotel is 3 miles of state highway from I-25. The city doesn't take care of those roads; the state does.

What nonsense.

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