The Case for Local Government Transparency: Evansville Style

By: Brent Grafton, Candidate for Evansville City Council from the 5th Ward

Local governments all over the country are realizing the benefits of being more transparent and seeing how transparency is directly related to effective governance. By being able to comprehensively engage their constituency, they are able to open up lines of communication which, as mentioned before, results in a more educated citizenry and better policy decisions. Transparency and governance intuitively just seem to go hand in hand. What is difficult to understand is with such an intuitive relationship, why is transparency so difficult to put into practice.

As an appointed member of the Evansville Board of Public Safety in Russell Lloyd Jr.’s administration, my fellow board members and I were subject to Indiana Code 5-14-1.5-2. That particular part of the Indiana’s law defines for us just what constitutes a meeting that must be announced and open to the public. There were also restrictions on having ad hoc meetings to discuss City of Evansville business. To put it bluntly, we were not allowed to make policy or spending decisions or even have discussions about such matters outside of an announced public forum. All of the appointed boards whether compensated or not were subject to these so called “sunshine” laws.

I recently became aware of a situation where the Mayor of Evansville appointed an Advisory Committee made up of citizens and a single elected official to make a recommendation on just who will manage the new Evansville Arena. It is also my understanding that the Advisory Committee’s recommendation will be made to the Evansville Redevelopment Commission whose members are appointed by the Mayor. It is furthermore my understanding that certain members of the Evansville City Council are not in agreement with the recommendation of the Advisory Committee or the process that it went through to reach it.

Managing the new Evansville Arena is an important financial decision to the people of Evansville. This decision will greatly affect the cash flow of the Arena and the ability of the City of Evansville to pay for the operations and make the bond payments according to the commitments that have been made by our elected City Council. To make the decision on what firm will be hired without public deliberation, while it technically may be legal, should have been conducted in the public forum.

Business leaders are not always aware of the details of public disclosure when asked to serve on committees. It is up to elected government officials who they choose to serve to advise them of such rules. It is also of paramount responsibility that elected officials embrace transparency as a way of conducting the business of government in all areas.

Transparency promotes accountability and provides an opportunity for residents to be better informed about what is going on in their communities.

Transparency creates an avenue for the public to start demanding more information, and this is generally considered a good thing.

Transparency promotes trust of local government among the people of Evansville. If the people of Evansville’s 5th Ward are generous enough to choose me as their next City Councilman, I pledge to be as transparent as the law allows and to expose any and every situation not only where sunshine laws apply but to where sunshine laws should apply.

First Public Meeting on the Issue of Arena Management at Tomorrow’s Evansville Redevelopment Commission Meeting

MEMORANDUM

FROM: Jonathan Weinzapfel
DATE: January 31, 2011
RE: Arena Management Contract Process

I am writing to address the process of selecting a company for the negotiation of a contract to manage the new Evansville arena in conjunction with the Evansville/Vanderburgh County Building Authority, all under the authority of the Evansville Redevelopment Commission.

In March 2010, the decision was made to have the Evansville/Vanderburgh County Building Authority (“BA”) assume responsibility for the maintenance tasks at Roberts Stadium, The Victory Theatre and Mesker Amphitheatre. In addition, the BA assumed direct supervisory responsibility for the City employees assigned to support the operations being managed by SMG at these facilities. The motivation for this change was a projected $300,000 savings in the budget of the Parks Department which was expected to result from the reorganization and change in management.

As a result of that decision, it was necessary to change the existing contract with SMG, the private firm responsible for the management of those facilities under a public/private building operating contract. Because the new Evansville arena was expected to open Downtown in November 2011, it was also necessary to negotiate changes in the contract related to Roberts Stadium until the new arena opens. The contract for operation of Roberts Stadium could have been terminated at the end of 2010, but the City needed to continue its operations for the first 10 months of 2011 to coincide with the new arena. Accordingly, the extension of the SMG contract was negotiated at the same time as were the changes to the scope of work resulting from the BA’s new responsibility. Although SMG was no longer responsible for those items which had been transferred to the BA, the SMG compensation arrangement was not modified. As part of the negotiations for this extension, SMG demanded the right to negotiate first for a contract to operate the new arena. Accordingly, the City began discussions with SMG for the purpose of reaching an understanding that would form the basis for a recommendation for the award of a professional services contract for the management of the new arena.

During the course of those discussions, the City sought to change the financial arrangements in the new contract to focus more effectively on the desired outcomes. Specifically, the City wanted to define financial incentives for SMG to incent the strategic goals of the new arena, such as downtown activity, event attendance and bottom-line performance, rather than gross revenues as currently structured. Of particular focus was the use of net cash flow rather than gross cash flow in order to place more emphasis on expenditure accountability and control. Within the first several months of the BA assuming maintenance and employee management, it became clear that expense management was an area open for significant improvement, as the projected savings of $25,000 per month was being achieved and surpassed.

The second area of focus was on the identification of the individuals to be assigned as SMG’s senior management staff on-site in Evansville. It was thought that the new arena’s role in the community and its potential was far different than that of Roberts Stadium and that staff with senior management experience with downtown arenas was critical, as was experience with the development and implementation of the grand opening activities. Finally, the potential for sponsorship and marketing opportunities in the new arena was significantly different from those in place at Roberts Stadium.

The discussions with SMG on these issues illuminated three points of contention. First, SMG was initially very reluctant to focus its financial incentives on net revenue or on attendance goals that reflected any activity significantly greater than that which was occurring already at Roberts Stadium. Second, SMG believed that the existing staff at Roberts was sufficient to manage the new arena and that the lack of experience with grand openings would be offset by other SMG staff members coming to Evansville temporarily on an “as needed” basis. Finally, SMG believed that the functional transfers to the BA in March 2010 needed to be undone and that SMG should resume management of the City employees.

With these three issues being presented and a need to reach an agreement as soon as possible, the decision was made to issue an RFQ seeking companies to be considered in addition to SMG. The RFQ was issued and responses were received from SMG and two other companies. An interview team (“Committee”) consisting of John Friend (City Council), Andy Goebel (Building Authority Board of Directors), Ed Hafer (Evansville Regional Business Committee), Wayne Henning (Evansville Arena Project Committee), Kathy Kleindorfer (Evansville Arena Project Committee), and Sara Miller (Evansville Redevelopment Commission), with additional support from John Kish (Evansville Arena Project Director) and Dave Rector (Building Authority), conducted interviews on January 6, 2011.

The Procurement Process

When the RFQ was issued, it was emailed to eight (8) companies which had either been identified as active in this business or who had contacted the Arena Project office and expressed an interest. Because of the need for a rapid response, a deadline of three weeks for the initial response was established. It was brought to my attention that the industry was concerned that Evansville was simply “going through the motions” and that SMG had a lock on the business. John Kish, the Arena Project Director, spoke with two vendors to assure them that the City was serious about considering other companies. As the RFQ was drafted, generic information was intentionally requested in an attempt to make a response relatively easy in order to encourage responses. Responses were received from SMG, VenuWorks and Central Illinois Arena Management, Inc. (AKA Southern Indiana Arena Management; operators of the arena in Bloomington, IL). Interviews with each company occurred on January 6, 2011.

The following items were reported to me concerning the proposals and interviews:

A. Central Illinois Arena Management

This is a small company which manages one arena in Bloomington, IL. One principal of this firm had been active in the effort to convince the City government to fund that arena project. They have managed the facility for a number of years. The facility is operated in part with services provided by City employees so the BA arrangement did not present them with concerns.

The company discussed their focus on management and the ability to attract talent to their building. They are part of a booking coalition of “independently” managed arenas (“independently” meaning not operated by one of the larger companies). They had previously met with the Evansville Arena staff in June 2010 and were proud to report that they had 13 concerts on their calendar through the end of 2010 while Roberts had only three.

Their proposal was to have one of the two owners move to Evansville to start up an operation for the new arena which would likely include the move of one other senior manager.

While the Committee was enthusiastic about the abilities and personalities of the two owners, in the end, the Committee concluded that there was an inadequate number of experienced staff in the company to support a start-up in Evansville. There was also an obvious vulnerability to some accident happening to one of the two owners and there being inadequate support to fill the resulting void.

B. VenuWorks

VenuWorks has been managing arenas and other public assembly facilities for a number of years and is currently managing 17 facilities in 10 cities. They focus on 10,000 – 12,000 seat facilities and smaller. They have a depth of experience with their senior management staff (as shown in the proposal) and have significant experience with the opening of arenas of this size in urban areas. The interview team presented by VenuWorks included a proposed General Manager, who they refer to as an Executive Director. The title reflects the thought that the person is intended to integrate in the governance structure of the owner. The Executive Director is expected to be the face of the arena to the public, when appropriate, and to the governing officials. The individual presented had a focus on marketing and booking acts.

The corporate staff was also impressive. VenuWorks asserted that the support provided by staff of the company to each individual facility was much more intensive than other companies would provide. They discussed the frequency of corporate reviews of local Executive Directors, including financial management, operations and client relations matters.

To book events, VenuWorks relies on both the local management team and two corporate talent buyers. The Committee felt that the corporate staff had substantial experience and was an active part of the support structure for local management.

The Committee had several concerns. First, they did not hear VenuWorks speak of its experience running an arena with a Division I NCAA presence. The company addressed this issue during a second interview by describing the experience of the various individuals in operating such a facility although none of the current facilities have that situation. Second, the Committee was concerned about the coordination of hockey and basketball and this was also addressed.

A significant question was presented about the prospect for conflict between one company managing The Centre and a second company managing the new arena. VenuWorks responded to this question on several levels. First, they described their experience in similar situations in other cities where SMG is operating another facility. Second, they described the realities of the marketplace and the differences between the two facilities as dictating which facility would draw which events. In essence, the differences between The Centre and the arena will be such that most events booked at The Centre would not be appropriate or feasible at the arena, and vice versa. Third, they emphasized that their goal was to do what was right for the community and they expected, particularly at the operating level, that the two companies would be cooperative.

VenuWorks also emphasized the market being a major force in the ability of the facility operator to draw events to the new arena. Evansville is a good market, well known to promoters. They asserted that their staff had relationships with all of the promoters currently coming to Evansville and those representing the acts which we hope to attract. After reviewing past activity at Roberts, they identified an opportunity for certain other types of shows to play in the new arena.

VenuWorks emphasized its desire to work with local vendors for food and supplies. It also expressed a commitment to the MBE/WBE goals and objectives.

The Committee asked for one final statement of why VenuWorks would be the best selection. VenuWorks replied that the new arena would be one of its premier buildings, and would get the appropriate attention of their corporate staff. We would be their most important client, not one of hundreds.

C. SMG

SMG is the world’s largest manager of publicly-owned entertainment facilities, with about 220 facilities under contract, including four (4) in Evansville.

The SMG presentation discussed their corporate capabilities. They brought eight (8) people to the interview, including Todd Denk, and six others who would not be based in Evansville. They proposed one individual who would be transferred to Evansville to be responsible for management of the new arena. When this individual was originally identified as a candidate for General Manager during early discussions, SMG asserted that Evansville “could not afford him.” He was also discussed as being an “on-call resource” for the opening of the arena. Because his experience is in building operations, this offer was thought to be helpful but somewhat duplicative of the services to be provided by the BA. The concern was that someone with more of a marketing focus and personality was needed.

The corporate experiences cited by SMG were significant, but its presentation left some Committee members asking where these capabilities had been during the past few years.

When SMG was asked to make a self-assessment of their operation at Roberts Stadium, they indicated that they did an excellent job and that any issue was directly related to the condition of the building. The Committee was troubled that SMG did not mention any maintenance issues previously identified by the BA staff, nor did they mention any issues with the marketing of either the events or of sponsorship opportunities within the building.

The Committee asked SMG to provide their views on how they would respond if they were not selected and therefore needed to work with another company as they operated The Centre. The response, which was not well received, was that SMG would focus on satisfying its client, the County, and that would be its focus. While understandable, most Committee members thought that some acknowledgment of the potential for working towards common goals and objectives would have been the preferred attitude.

In summary, the Committee concluded that SMG was a highly successful and skilled company, but that their long-term focus on the success of the new arena was a concern. One Committee member commented that he never expected to see most of “those people” in the interview ever again even if SMG were awarded the contract. They also concluded that the proffered candidate for the position of General Manager was unacceptable.

SMG Experiences

It is not possible to consider the selection of a management company without a hard look at the performance of the incumbent. Indeed, in most procurement processes of this type, the incumbent company will go to great lengths to illustrate the advantages of continuing its contract without the disruption that any change is likely to cause.

In this case, it is very significant to mention several issues based upon the City’s recent experiences with SMG at Roberts Stadium. First, the City’s decision to utilize the BA to provide maintenance and management of employees was driven by the failure of SMG to focus on the proactive management of the facility and the employees. SMG did little to schedule work in order to reduce overtime expenses. Maintenance of the building systems at Roberts Stadium and The Victory was also sorely lacking. The BA reports that air filters had not been cleaned for quite some time. Chairs, toilets and drinking fountains were also simply taken out of service rather than repaired. Unrepaired HVAC units are thought to have contributed to problems with sound equipment at The Victory.

Second, as a result of competitive procurement processes and different approaches to accomplishing certain aspects of the work, the BA has been able to reduce operating expenses in excess of our original projections. Savings against the SMG budget for the period of May – December 2010 include: $223,500 in employee costs, $78,000 in building maintenance costs and $60,000 in HVAC service contracts. Similar savings are seen in snow plowing contracts. In this context, it is also significant to note that VenuWorks is proposing to operate the new arena with 20% fewer FTE employees than SMG, another significant cost savings.

Third, rather than embrace the cost savings efforts of the BA, some SMG employees have actively resisted them. This resistance has been brought to the attention of senior SMG Evansville management with little initial effect. As part of an outside audit of operations, one Evansville manager reported to the auditor that he refused to cooperate with the BA in Roberts Stadium. Only when the auditor advised the employee that his continued employment was in jeopardy did he reconsider. Significantly, the local management structure has been revised with the SMG Regional Manager also now serving as the Evansville General Manager.

In summary, the City has been working to develop a contract for the operation of the new arena with financial incentives focused on its role in a revived downtown and with personnel experienced in opening, marketing and operating such venues. The City wants a company and individuals dedicated to making this work, not to explaining problems, and needs someone focused on Evansville and our success.

The City solicited proposals. A non-partisan group of community leaders conducted extensive interviews. The Committee unanimously recommended that the City award the contract to VenuWorks. The Committee worked hard to understand both the upsides and pitfalls of its choices and I support the results of the Committee’s work.

I hope City Council will recognize the unanimous recommendation of this non-partisan Committee and avoid politicizing the subsequent actions of the Redevelopment Commission as it reviews that recommendation at its regularly scheduled meeting on Tuesday.

Please call me if you would like to discuss this matter in further detail.

IS IT TRUE? January 31, 2011

IS IT TRUE that the sunshines bright in the old Kentucky home but that the sunshine (as in laws) may be getting blocked by the doors to the back rooms on this side of the money saving bridge in the City of Evansville?…that sunshine laws have a purpose that is only fulfilled when they are allowed to fill the back rooms with the light of disclosure?

IS IT TRUE that the State of Indiana has open door (sunshine) laws that are defined by Indiana code 5-14-1.5-2?…that a principle purpose of these laws is to assure that closed door meetings are not used by politicians to determine what to do with taxpayer dollars?…that a public agency is defined , among other things, as “Any advisory commission, committee, or body created by statute, ordinance, or executive order to advise the governing body of a public agency?…that there are a few exceptions contained in 5-14-1.5-6.1?…that it is subject to legal review as to whether or not the stadium management advisory committee and the Evansville Redevelopment Commission are defined exceptions to this law?…that the meetings of the advisory committee have not been announced, posted, or open to the media?

IS IT TRUE that Indiana Code 5-14-1.5-2 is accessible through the following link?
http://www.in.gov/legislative/ic/2010/title5/ar14/ch1.5.html

IS IT TRUE CITY COUNTY OBSERVER MOLE # 3 earlier today predicted that a political battle looms between Mayor Weinzapfel and the Evansville City Council about yet another back room deal done outside of the halls of government to select the new firm to manage the new Downtown Evansville Arena?…that this clandestine action has become a fever pitch political issue? ….that City Councilmen, Dan McGinn’s e-mail we received from an confidential source and published earlier today concerning the fact that SMG lost the new arena contract has elected officials fuming?

IS IT TRUE that an Advisory Committee to study and recommend which marketing firm should promote the activities at the new Downtown Arena was appointed by the Mayor? ….that the members of this Committee are City Councilman, John Friend, Arena Project Manager John Kish, New Downtown Arena Project manager, Dave Rector, Vanderburgh County Building Authority Director, Andy Goebel, retired Vectren Executive, Sara Miller, Old National Bank Executive, Ed Hafer, retired architect, Wayne Henning, Retired banker and Past Chairmen of the new arena study Advisory Board and Kathy Kleindorfer an independent consultant?

IS IT TRUE that this Advisory Committee met several times to discuss which firm should manage the new Downtown Arena? ….that the last meeting of this committee was held at Vectren Corporation’s offices in downtown Evansville on the 2nd floor?….that when the committee seemingly decided to make final recommendations who they decided to manage the new arena that they were escorted the 8th floor Vectren Conference room? ….that Mayor Weinzapfel was already sitting at the head of the table in the conference room to hear the advisory committee that he appointed tell him what their final decision would be?…that this meeting was not announced, posted, or open to the media?

IS IT TRUE we wonder if this Committee took minutes of the discussion and actions taken at this gathering….we wonder since this meeting was to discuss the “People’s Business” and shall make their choice public to the Evansville Redevelopment Commission this coming Tuesday shouldn’t this adhere to Public Access (Sunshine) laws?

IS IT TRUE we wonder how this Advisory Committee can make a decision on who the best firm to Manage the new Downtown Arena since they didn’t discuss any of the terms of the contract to be offered by all the bidders for this project?

IS IT TRUE we predict that the Evansville Redevelopment Commission will be surprised who show up to make comments and ask questions about this political “Hot Potato” ?

Here is the message without edit or bias:

Hi John (Hamilton),

I would like for you to research an issue for me. Also I need some information.

Let me preface this request with a couple of remarks: I think the ERC has too much power for a board that is not accountable to the voters. I want the City Council to take back some of that authority. How can we do that?

Can we require that all non-competitively bid contracts that they handle be presented to Council for review and approval or at least discussion before they sign a contract?

Also, I am sure that by now you are aware that a controversy is boiling about who is to get the contract for management for the Arena. Who signs that contract? How can Council have a say in it? If in fact we can get control of the contract approval for this, how do we do it?
Please give me a call if you have any questions.

Parks Current Condition Confirms Dr. Troost’s Assertions that SOMETHING MUST BE DONE

This video speaks for itself so we are posting it without editing or bias.

The Growth Alliance for Greater Evansville (GAGE) is pleased to announce that Fat Head Media has recently located at Innovation Pointe in Downtown Evansville. Fat Head Media is owned and operated by creative master Damon Hancock. Hancock formed Fat Head Media approximately five years ago working primarily from his home office. As his communication company and clientele grew, Hancock felt that a larger space was needed. Fat Head Media now has a full video production studio at Innovation Pointe (Suite 302), with access to conference rooms, free internet and phone service as well as other amenities offered to tenants at Innovation Pointe.

Fat Head Media’s mission is to leverage the ever-changing world of media and web technology to communicate their client’s stories in unique ways. They offer many services such as video production, iPhone app development, social media strategies, web and mobile web design and more. Hancock and his creative team feel that it’s important to produce lasting relationships with their clients by offering flexibility in pricing, listening to their clients’ needs and wants, and by often producing agency quality services in less time at a lower cost. You may contact Fat Head Media at 318 Main Street –Suite 302, Evansville, IN 47708. Phone: 812.202.1422, Web: http://fatheadmedia.com.

Innovation Pointe is the Entrepreneurial Division of the Growth Alliance for Greater Evansville. Located in the heart of Downtown Evansville, Innovation Pointe strives to assist in the creation and growth of new businesses in the Evansville area to increase the wealth of our city and people. For more information on how to become a tenant, please contact the Growth Alliance for Greater Evansville (GAGE) by calling 812.401.4243.

IS IT TRUE that the park on the corner of 4th St. and Main in downtown Evansville is up for sale?…that after many months there are no offers?…that the Kempf family owns the prime corner of the park and that Old National Bank owns the remainder of the quarter of an acre parcel?…that downtown parks add vitality to urban areas as no other well kept feature can?…that cities are known for how they treat their parks?…that the Kempf family would like to see this remain a park?…that well over 50% of the available office space in downtown Evansville is now vacant including many Main Street storefronts?

IS IT TRUE that one more vacant building at the expense of the park would ad no value to downtown Evansville from an aesthetics perspective?…that ONB has publically talked about the financial burden that keeping the park up places on them?…that mowing a quarter of an acre is a financial burden that nearly every homeowner of all economic classes seems to be able to deal with?…that mowing such a lot and trimming the landscaping should cost no more than $100 per week during the mowing season?…that that would amount to a whopping $2,600 per year?…that the City of Evansville should just take over the responsibility for mowing the park and enable downtown Evansville to keep this Main facing green space?

IS IT TRUE that the parks of Evansville have more problems than the fact that ONB wants to convert it’s “non-performing asset park” into US currency?…that last fall Dr. Neil Troost stood before the Evansville City Council to advise them that his 6 year old daughter had been stuck with a discarded hypodermic needle while playing in Sunset Park?…that Dr. Troost has started a campaign to get the attention of the Evansville administration to do something to improve the safety at Evansville’s public parks?…that 10 weeks after requesting a meeting with the City of Evansville Parks and Recreation Department he had not heard a word from them?

IS IT TRUE that last week Dr. Troost let it be known that he would be bringing this subject up at a public meeting on Wednesday February 2nd?…that upon hearing about Dr. Troost’s plans to make this more public than he has already that the Parks and Recreation Department has now offered to meet with him privately?…that the condition attached to the meeting has been alleged to be that he abandon his plans to bring up the state of the parks of Evansville in a public meeting?…that it is a sad day in river city when a parent can’t get the attention of the City of Evansville for 10 weeks when needles that were most likely discarded by drug addicts are littering children’s play areas in public parks?…it is even a sadder day if it is really true that silencing someone’s first amendment rights are a condition for an audience with the parks board?…there will be an update to this soon to call upon the concerned citizens of Evansville to support Dr. Troost in his crusade to get our City Administration off its backside and make Evansville’s park system something safe that we can be proud of?

IS IT TRUE that entrepreneurship in government is a rare commodity?…that the State of Hawaii has positioned itself to capitalize on the paranoia of millions of Americans who are not convinced that President Obama is a native born citizen?…that for a fee of $100 subject to approval of the legislature of the State of Hawaii the doubters among us can satisfy their curiosity and order a suitable for framing birth certificate of one Barack Hussein Obama II who was born in our 50th state and went on to become President of the United States?…that this would make a fine gift for family members who doubt the origin of President Obama’s birth?

Those of you who have been accessing city-countyobserver.com via phone may have noticed a change lately.

We have just launched our mobile-friendly website! Sleek, simple, fast-loading, CCO Mobile!

Now you can get your recent current events, and daily “Is it true?” even while on the go!

Is it true that the City County Observer will be heard on Newstalk 1280 and WJLT (Superhits 105.3) starting TODAY? That the “monster combo” of radio exposure and CCO Mobile will have more people than ever asking “is it true?”.

Add ( + ) us to your home screen on your iPhone, and next time everybody’s asking “Is it true?” you’re 1 button away from knowing!

I’ve been a financial advisor for over 20 years now. During that time I believe I have seen almost every mistake you can possibly make with money. Take advantage of my experience and learn from other people’s mistakes. Begin the year with some Financial New Year resolutions. Many people say they procrastinate or never keep their resolutions. So in this article I’m offering up the easiest to implement and highest impact ideas I have to get your financial New Year off to a great start!

#10) Contribute to your company’s retirement plan – Many employers offer matching funds to any money you contribute to their retirement plan. Usually these matching funds are limited to the first 1-6% of your annual contributions. These matching funds can be anywhere from 25% to 100% matching contributions. If you don’t make your contribution, your employer doesn’t match your contribution and you lose out. If your company offers a 50% match on your contribution you’re earning a 50% return on your money by contributing to the company plan. Realistically there is no way any financial advisor is going to be able to equal that kind of return on your money. Example: Say your annual salary is $40,000/yr and your employer offers a 50% match on the first 6% of you contribute. An annual contribution of 6% or $2,400/yr would let you receive an additional $1,200 in matching funds from you company.

#9) Avoid debt – Much has been written and said about this over the years and millions of Americans have learned the hard way about taking on too much debt, especially credit card debt. However, it bears repeating again. As a general rule you should limit your debt to your home mortgage and a car payment. Debt repayments of any more than that and you are playing with financial fire. This doesn’t mean you have to or should tear up all you credit cards. What it does mean is that each month you should pay the full amount of any charges you have made on your card(s).

#8) Make a budget of your expenses – Review your list of resolutions. You know in your heart about the the vices or bad habits you may have. Smoking, alcoholic beverages, gambling, premium coffees, to many soft drinks, or to much fast food, excessive cell phone charges. All of these can add up to big dollars by the end of the month. Try to find one or two small things you can give up. Every little bit adds up. Saving $5/day adds up to $150/month.

#7) Invest systematically – Take any monthly savings you find and invest it systematically into a monthly savings plan. A monthly savings plan can be set up easily through your employer’s retirement plan, your local bank or credit union or your financial advisor. You’ll be pleasantly surprised about how much you can build up if you stay with it. In the above scenario the $150/month invested for 25 years at a 10% return yields about $200,000 at the end of the 25 year period.

#6) Review your cash reserves – There seems to be no middle ground for many investors on this one. Many of us have way to little in cash reserves or way to much in checking, savings, and money markets. Many financial advisors recommend that you have 6-12 months of salary set back in accounts that could quickly be converted to cash or checking deposits. This is a rule of thumb and a good starting point. However, your cash reserve balance should be based upon many factors, including whether your married or single, one income or two, whether or not you are self-employed, your job security, risk tolerance, years to retirement, the amount of equity you have in your home, how many children you have, etc. The point is to review you cash balances with your financial advisor. If you determine you’re short on cash reserves, immediately begin a monthly savings program to build them up. If your balances are too high consider investing the excess balances into a Roth IRA or other mid to long-term investment programs.

#5 Get out of the house – Ok, so what I really mean is to invest more overseas. Many investors suffer from what is called home country bias. Most Americans have a disproportionate amount of their investment portfolio right here in the USA. Investing more here in the good ‘ol USA may give you what you think is a lower risk, sleep at night factor. Counter intuitively, the opposite is true. It can be shown through the mathematics of modern portfolio theory that investing a portion of your investments overseas can reduce the overall risk of your accounts, increase your return or both.

As late as the 1970’s the US economy was more than half the total global economy. Today that has shrunk to about 20%. Because of electronic trading and globalization the diversification benefits of investing internationally have been declining over the last 10-12 years. (The subject for a future article)

Nonetheless, the diversification benefits of investing overseas are still well worth it. Some of the best companies and fastest growing economies are located overseas. The average investor here in the US has about 7% of their portfolios invested overseas. I generally recommend a range 10-30% of your long-term
portfolio be invested in international stocks and bonds, depending of course on your financial goals, age
and risk tolerance. For your reference regarding overseas investments: Global means a fund with both international and US investments. International means a fund invested strictly in developed countries
outside the US such as Canada, Japan, Australia South Korea and most of the Western European economies.

#4 Ignore the financial media – I know it’s hard to do, but its best to ignore the media projections and the pundit’s predictions. It’s fine to track your accounts and stay informed about the financial markets and recent economic data. However I would refrain from adjusting your financial plan based upon any forecast or hot stock tip. Those in the predictive business such as economists and stock analysts are bound to have some major missteps during their careers. An analyst who achieves 50-50 track record on the direction of any stock or stock market sector would be considered outstanding. A look back at the major media’s predictions from previous years about the economy, individual stocks, mutual fund, or economic sector to invest in would no doubt yield some rather dubious picks. This is not saying you should ignore major
macroeconomic trends, just don’t rely on them from month to month or even year to year. Further, if
you’re broadly diversified, as you should be, then you’re likely to have at least some of your money in what the pundits are advocating. So don’t sweat what the media is saying, their interest is in ratings, not necessarily good financial advice.

#3 Be a political skeptic – This may be a hard one for some of the reader’s of this on-line journal. Is Obama becoming more pro-business? This and other popular political questions are discussed ad infinitum, ad nauseum in the financial media. First of all, you have little to no control over this. Therefore, I recommend to focus on what you can control. The biggest determinate of every investors portfolio is the one they have the most control over, your level of diversification. Determine the level of risk/return you’re comfortable with and then with the help of a qualified financial advisor develop a well diversified portfolio that is targeted to achieve your desired rate of return.

#2 Know what you own – This can’t be repeated enough. Millions of Americans own financial assets or investments that they have been disappointed in or worse; products that are either way too expensive for
what the owners receive in return, or are unsuitable for their age, risk tolerance, or financial goals. This
doesn’t mean you need to run to the filing cabinet and dig out that prospectus or annual report and read it cover to cover. What it does mean is that if you have a stock, bond, mutual fund, annuity or insurance
product that you’re not sure what its purpose is, then you need to have your financial advisor sit down with you and explain to you in plain English just exactly what you have and why you have it.

#1 Get a financial plan – Did you expect anything less from a financial advisor? Seriously though, one of your best investments could be to pay your financial advisor to make a comprehensive review of all your finances. A comprehensive review should include: a review of your cash reserves, cash flow, life, disablility, and long-term care insurance including your group plans, investments, debts, federal and state taxes, projected retirement plans and estate plans, including beneficiaries, wills and trusts. Make sure that your investment and retirement plans fit hand in glove. For instance, if your projected retirement plans says that in order to reach your retirement goal at the desired age and standard of living your investments need to make 7.5% then your investment portfolio should have a mix of cash, stocks, bonds, real estate and commodities that is targeted to earning 7.5%.

So, now you have a checklist of things to get accomplished in 2011. Next week marks the beginning of the
busy part of tax season. I encourage you to make a pledge to gather all your financial information and get
with your tax preparer, financial advisor or both and begin reaching your financial goals today!

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the
purpose of avoiding any federal or state tax penalties.

Steven Smith Financial
5908 Berry Lane • Evansville, IN • 47710
Phone: 812-484-9338 • Fax: 812-402-5024
www.stevensmithfinancial.com

Securities are offered through Financial West Group (FWG), Member FINRA, SIPC
2226 S. Airport Road W. #C, Traverse City, MI 49684

Steven Smith Financial and Financial West Group are unaffiliated entities.

By: Brent D. Jackson

Brent Jackson is a Certified Microsoft IT Consultant with Innovative Data Technologies. I have actively been pursuing changes to the EVSC netbook program, but my requests have fallen on deaf ears. I have spoken with Vince Bertram, the School Board, Bosse High School, and the Courier & Press. There are some serious problems with the netbook program and the devices themselves. Below is a letter that I sent to the school board members and the Courier. To date there has been no reply. I believe that my concerns are valid and newsworthy.

Dear Editor,

The Evansville Vanderburgh School Corporation curriculum now requires netbook usage in the classroom environment. The EVSC has rolled out some 7800 little laptops (netbooks) for some grade & all high school students. The netbooks are rented at $35/semester ($70/yr) and are checked out concurrently with their books. Insurance can be purchased from a third party provider at $52/yr with a $25 deductible (first time claim). A Netbook User Agreement is sent home with the student that in so many words, says the usage of this netbook constitutes agreement to the rules found within. It is a statement of protection on behalf of the EVSC with no rights or privileges granted in consideration or favor of the end users.

Last years netbooks were found to be weak and arguably contained a common workmanship defect. The root of the problem in the netbooks was that a latch that is meant to hold on to the removable battery was easily broken on one side of the netbook. This problem, (if not fixed) then cascaded into the LCD screen being cracked in the right hand corner of the screen when a student opened the lid. The EVSC chose to keep these defective laptops in the field of service which in turn caused the $15 latch part replacement to a $200 LCD screen replacement. This would go against any return or replacement policy that HP has. The EVSC lawsuit against HP should be dismissed because of this principle alone.

This year, the EVSC has purchased 7800 Dell Latitude 2110’s. Even though this is a different species of a netbook, this does not alleviate many of the other problems with the EVSC netbook program that has gone unanswered. Vincent Bertram, the EVSC Superintendant believes that this program will close the gap on the”digital divide” between classes of people. This is an over presumptuous statement that mistakenly implies that sending a netbook home with the misfortunate students of Evansville who don’t already have a computer at home would for some reason or another have internet capabilities and make full use of the netbooks surfing/researching abilities. A student could very well find a Wifi Hot Spot somewhere in town, but it is unlikely and difficult for a student to find a hot spot which provides them a suitable study environment. Not to mention that many students are not allowed to stay out after dark. In reality, the EVSC has sent home a very expensive and fragile word processor for our students to use.

The EVSC also hopes to eliminate the textbook expenses someday. The perception that we will be phasing out textbooks in their entirety is a delusion. At no point in time will we cease to have a textbook or a publishing house vendor that sells media to the EVSC. Whether it is a paper or paperless textbook solution, there will still be cost involved for the copyrights or licensing of any certifiable scholastic reading materials for the students to use on their netbooks. The costs of paperback textbooks will never compare to the cost of the netbooks. Not to mention the additional power usage, technical and administrative support that is needed to keep these laptops in tip top shape. The EVSC signed a 3 million dollar contract last year with HP; and again signed another $3 million dollar contract with Dell this year. This has got to be the most expensive netbook program in the State, if not the country.

With that said, all of the Dell netbooks that were purchased this year have integrated cameras in them. I would agree that on the surface level this is an attractive feature; but this opens a lot of other doors for those who may prey on the students. A person who is familiar with a programming language (like Visual Basic or C++) could in fact write a program that could infect the other netbook computers at the EVSC that would then allow them to remotely activate and stream the captured camera video images to their computer at home. The current EVSC Computer Administrators could disable all network cameras by Group Policy at the server level, but if the Administrator password has been hacked, it may make no difference anyhow. The EVSC System Administrator password was hacked 12 times by students last year. If the administrator password is hacked, it renders the computers and the computer network the official playground of any savvy user. A person could wreak havoc on the systems at large. Including, but not limited to, the access of every computer or device that is joined to their Windows domain. With the security measures defeated, the servers, the netbooks and their vulnerabilities can be shared with other students for further multiplied manipulation. Parents should further consult with their child about the additional considerations and responsibilities when you have an integrated camera.

The EVSC always encourage parental involvement with the school system, but seemingly there are limitations to this relationship especially in retrospect. There has been no public discussion or open forum on the financial, physical, or most importantly the moral considerations of the netbook program. The EVSC Board Meeting minutes on the EVSC website have no mention of any netbook program prior to June 8th of 2009. No other notice was given prior to the netbook implementation 3 months later. It is inconsiderate and disrespectful to not only the parents, but the teachers too; slipping this netbook program in under the radar without any long term planning, discussion or respectable teacher/student/parent readiness considerations. It is interesting to note that it has been the EVSC’s policy to confiscate and reprimand student’s for cell phones, iPods, or other electronics including privately owned laptops (5136 – CELLULAR TELEPHONES AND ELECTRONIC COMMUNICATION DEVICES). However the school issued netbooks seem to escape violations of this written and unchanged policy even though the netbook fits the criteria of this policy on their website.

In conclusion, the EVSC has indirectly told me and 15,000 EVSC parents (in so many words) that we are responsible for a fragile computer that will be given to our teenager; with a built in video camera; and we have no say or insight into the level of security, service or expectations in the netbook program whatsoever. We are further expected to pay for it through taxes and nearly doubled book rental fees. Any outcome, for better or worse, is going to be acceptable. And if the program is a failure, the EVSC will have no desire or ambition to share any contributing report as to why the previous netbook program has failed in its entirety and what changes have been made this year to assure us that this will not happen again. For all of the reasons stated formerly in this letter; it is in my opinion that the netbook program in its current state that the proper due diligence was ever performed to reveal all of the weaknesses in the netbook program. It does not meet the expectations of the EVSC nor the parents and it is definitely not in the best interest of educating our students or straddling the “digital divide” as we have been told. It is an inefficient program that not only cost money, but learning time as well. This has a direct and immediate effect on our student’s grade earning abilities and the program should be killed!