David's Blog

Community members are becoming increasingly aware of the City of Duluth’s ominous, expanding financial dilemma being fueled by the City’s employee retirement benefit package liability. Simply defined, it is an unfunded, compounding debt that will soon come due. The retirement benefit package liability is the single greatest financial challenge confronting Mayor Bergson and the city councilors.

Individuals and various interest groups are drawing more and more attention to the liability. There is a growing drumbeat calling for the Mayor and the Council to address and correct the situation. Exasperated voices – voices that are becoming less patient, more demanding, and shrill – ask: “Why doesn’t the Mayor take care of the problem?” At a minimum, community members are perplexed by the apparent lack of progress in addressing and resolving the concern.

I understand and appreciate the challenge. The Duluth Area Chamber of Commerce fully comprehends the issue and the need for action. Yet, we also understand the monumental challenge the Mayor faces in addressing the problem.

Change means movement. Movement means friction. Margaret Atwood, a Canadian poet and novelist said it well: “Better never means better for everyone…It always means worse for some.” The existing retiree benefit was negotiated into the city employee contract several years ago. The city’s leadership must now negotiate with five separate bargaining groups in order to make a change in this package. Yet, the union’s leadership will not give up an employee benefit unless it is in the union’s best interest to do so.

Clearly, the Mayor has his hands full.

The Chamber understands the challenge confronting the mayor and the city council. I recently read the book Changing for Good. The title is telling, as it implies that change might occur for the better or the long-term. While change may be necessary and lead to a positive outcome, it does not often come about easily. On the inside cover of the book is a simple quotation, which reads, “For every complex problem there is a simple solution…and it is wrong.”

There is no simple solution to the retiree benefit liability.

The Chamber’s leadership has offered to assist the Mayor and the Council in addressing the problem. We are willing to make the business community’s finest leaders available to the mayor and the council, volunteers who will invest their time and talent to review the City’s retiree benefit liability and develop proposals for addressing the concern. The offer was extended to the Mayor early after he assumed his mayoral duties. The same offer was made to Council President Donny Ness shortly after his recent election to the president position.
We stand prepared to be a part of the solution. I hope we are called into service.

The boss says, “Jump” and the employees say, “How high?” This old quip may once have been funny – but no longer. It implies that a business owner needs only one tool in the toolbox: power over employees. Thankfully, times are changing, particularly in the world of volunteer-led organizations.

Volunteer-led organizations like the Duluth Area Chamber of Commerce are the most leadership-intensive enterprises in modern society. True, many business owners and operators may question that assertion, but the more one considers its rationale, the more evident it becomes. Simply put: this belief rests on the understanding that positional power does not work in volunteer organizations.
In a typical private business, the owner or operator has the position and thus the power to direct employees to do things, and to do them in a certain way. Business owners have tremendous leverage in the form of salary, benefits, and perks. Most followers are cooperative when their livelihood is at stake. In the military, leaders can use rank and the threat of discharge to get things moving.

In strong contrast, the major motivating force in voluntary organizations is the purest form of leadership: influence. Leaders have only influence to aid them. The ability to motivate others to participate is the essence of the power to influence. Participants in voluntary organizations cannot be forced to do anything. If a volunteer leader lacks influence with other volunteers, he or she will be ineffective. If a businessperson truly wants to find out whether his or her colleagues are capable of leading, he or she has only to encourage them to invest their time in a volunteer leadership role. (By the way, the Chamber will soon be looking for new board members.)

I interact with business owners who are accustomed to getting things accomplished by deciding what has to be done and then simply doing the task themselves or directing their employees to do it. There is efficiency is this approach, but it doesn’t work well outside that businessperson’s work environment. The more directive the style of the business owner the more frustration he or she experiences in trying to lead volunteers. (These same leaders have, on more than one occasion, voiced frustration and concern with the length of time involved in working an initiative through the Chamber. I have been asked: “Does this issue really have to go through these committees and the board of directors before we can proceed?” The procedure was a point of concern, as well as an education, for some of our members.)

Other volunteer organizations (e.g., The Duluth Public Policy Alliance, The Northland Sustainable Business Alliance, Connect Duluth, The Bridge Syndicate or Duluth First) face an amplified challenge in that they are entirely volunteer-led. Theses organizations do not have a professional staff to support their volunteer leadership. Their only power lies in motivating volunteers to participate in their various causes; and volunteers must be encouraged, educated, humored, empowered, appealed to, applauded and otherwise influenced into action. I have respect and admiration for the leaders of these volunteer organizations. In summary, I encourage Duluthians to put their leadership skills to the test within a volunteer organization like the Chamber. Doing so will demand that they develop these skills in a manner that can only increase their leadership ability and influence.

Relative to Duluth’s population, few Duluthians own businesses and/or commercial buildings. Consequently, few Duluthians are aware of the Duluth City Council’s intention to charge business owners a fire inspection fee. To date, fire safety inspections have been standard procedure – at no cost to the business owner. If you are not a business owner, your interest in this issue may be casual at best.

For the first time this year, the Duluth Fire Department is issuing three-year operational permits to each of Duluth’s 1,200 businesses that are subject to the inspections. 400 businesses will be inspected annually. To obtain the permit, the business owner must pay $220 to $2,000 for the Fire Department safety inspection. This inspection and the corresponding fee are in addition to the business’ safety inspections required by the business insurance provider. Business owners will now have to pay three times (taxes, fees and insurance premiums) for what may be duplicative inspections.

The new inspection fee will be a burdensome, additional cost to business owners. These business owners believe the City is using the fee to help address its financial challenges. Moreover, these business owners feel they already give the City enough of their money in the form of property taxes. They feel they are taking on an inordinate burden as their taxes rise while this concurrent fee is charged. Many of these business owners are members of the Duluth Chamber of Commerce, which explains why the Chamber plans to challenge the City’s planned implementation of the inspection fee. As an advocate for our members, we are compelled to contest this double-dipping by the City. Our members feel the inspection is already being paid in the form of commercial property taxes. We agree.

The Chamber contends that business owners should not be required to pay multiple times for overlapping inspections. City Councilor Tim Little agrees. He plans to sponsor an amendment to a city ordinance adopted last fall that would allow a business owner to hire the Fire Department or a private firm to perform the inspections. Representatives from the Chamber will be contacting city councilors to encourage them to eliminate the inspection fee. I encourage you to join us in contesting the City’s inspection fee.

You can contact the city councilors by emailing: council@ci.duluth.mn.us