In his blog, the anonymous Ed Cognoski takes issue with some of the accounting of a proposed City of Richardson drainage fee. While doing so he attacks the concept of a redevelopment fund that would be used to spur redevelopment in problem areas while claiming he is not. Mr or Mrs Cognoski is wrong on both accounts. He actually claims he is critisizing "sleight of hand" in the budgeting process.  Ian McCann of the Dallas Morning News gives readers a good inside look but his comments need adjusting too.

Cognoski, Ed, or Ed Cognoski as usual gets his only information from a web source. In this case it is Dallas Morning News reporter Ian McCann's summary of the proposed drainage fee. As is usual Cognoski, Ed or Ed Cognoski does not attend council briefings nor dig into the subject in more detail.

What it seems is happening is neither accounting "sleight of hand" nor is it "Voodoo accounting" as one commenter puts it. We have a much simpler name in the English language for what is happening here and that name is "Accounting." We will get to what I mean by that later in our broadcast.

What Ed implies is false. The stormwater fee is not paying for the redevelopment fund.

What the City of Richardson and the City Council appear to be doing is two things. First, Richardson appears to be getting close to an inevitable drainage fee for storm water runoff, drainage culverts, creeks and the like. This fee is charged by most cities in North Texas and there are regulatory hurdles to pass before the City can proceed. Second, it appears to be making a decision about what to do with money from different sources by proposing the newly freed up money be put to use where it should have been long put to use.

I say inevitable for several reasons. Amongst them is that the apparent work on drainage areas including erosion control, brush removal, and physical repair cannot be done on the current $1 million budget. Many of us who are involved in neighborhood associations in older areas see the amount of work done and work that has yet to be done. To pay for this municipalities charge a storm water drainage fee. This fee is actually a utility fee and is regulated as such.

I have sat through some City Council worksessions on the drainage fee issue and it is not simple. Its been going on since early last year. Dan Johnson, Deputy City Manager, addresses this in Ian McCann's blog entry when he says, "there are far too many hoops to jump through before this fee and utility fund become set in stone." Having sat through those other meetings and having sat through budget retreats he is correct. Such a complex topic would dominate the time needed for broader budgeting issues. The budget process continues. There are further briefings, public hearings, and council action on the topic going all the way in to September.

The comparison to other fees that McCann makes in his blog is way off. Some of the proposed fees are user fees paid only by people who choose to pay them. Some, like the proposed library fees, apply only to Dallas residents because Dallas now charges residents from other cities. Lastly, these budgeted user fees generally will get nowhere near the amount of money the proposed drainage fee will get. We are talking about the difference between various 5 figure numbers and 7 figure numbers.

Cognoski said, "It looks like a way for Mayor Gary Slagel to finance a new 'redevelopment fund' by imposing a new storm water drainage utility fee." While its convenient that the money gets freed because of it, I don't think so. As noted this has been going on since 2008 when, in fact, Gary Slagel was not mayor. As I also noted this fee is inevitable unless you pay for the costs another way such as raising taxes.

Here is where this is "Accounting" as well as taking initiative on a problem area for Richardson. As I see it, what the City is doing accounting-wise is taking into account three accounting cost principals: economic cost, accounting cost, and (the most important in this case) opportunity cost. Now I am not going to try to explain these because I don't want real accountants to choke on their coffee. You can easily look up many sources on the internet to describe these.

However, Opportunity Cost is the important one. Opportunity cost involves figuring out the next best alternative to the cost of something. Lost time is considered an opportunity cost in business. When those opportunity costs are low compared to what you did do then you made a good decision. Another trite example to get the point across: Would you leave a $250,000 a year job to go to school for four years to raise your earning potential to $275,000? You would lose a million dollars and it would take 40 years just to earn it back. When you say, "No, I wouldn't do that" then you have made an opportunity cost decision.

Assuming the Council agrees to this fee and taking the freed up money to redevelopment, what they are saying is that this extra million freed would best benefit Richardson by spurring redevelopment. I believe they are correct. Should they use the money to begin to buy property for redevelopment, that redevelopment could raise property values resulting in more taxes in those areas which would, in turn, pay for the million dollars. Those raised values would take the pressure off the rest of the tax base if, hypothetically, they were not redeveloped. That is to say if you are a property owning taxpayer you should know that seeding redevelopment can be a good bang for your buck compared to the few pennies you might get back by rebating the taxes back to you. Letting these areas of Richardson decline will cost the taxpayer far more in the long run. This is a form of opportunity cost decision making.

The idea of a redevelopment fund is an important one for our city. What Ed Cognoski missed was an article by Ian McCann in the dead tree edition of the Dallas Morning News on Friday, July 31, 2009. (See page 3B.) In that article Ian McCann discusses the proposed redevelopment fund and potential Spring Valley redevelopment. Had Ed Cognoski seen that then he might have noticed neighborhood leaders -- myself included -- being quoted as favoring heavy redevelopment and by implication supporting the redevelopment fund. Former Mayor Steve Mitchell who lives near Spring Valley is heavily quoted as well.

This goes to show you there is support for this idea by the people on the front line that are immediately effected. We need to keep our eye on the ball. That ball is not only keeping blight out of the city but moving an area with great potential toward being a vibrant part of the city once again.