Archive for February, 2011

Business of Public Sector Organizations

Public sector is vast. In the United States, government spending makes up about 35% of the GDP. In Europe, the Government spending is 45-55%. It is a big part of economic life of any nation and globe. Public sector organizational and business models are different to that of private sector. Public sector models focuses on the collective choice of the society while private sector focuses on the individual choice.

Private sector assumes that the customer is always right and adapts their business model to cater customers’ need. But that is not the case in public sector. We in the public sector have to adopt the best practice whether the customer wholeheartedly agree or not. I think this is where the people started to feel that public agencies exist to control them. For example, all the natural resources in the country are controlled or regulated by the public sector. As we all know, exploitation of natural resources is a catastrophe. So there is no other way to control the use of such resources for the well-being of the community in the long run.

Another uniqueness of public sector is that it is usually a monopoly provider or offers free services for those who cannot afford to pay. Literally, there is no competition. So the customers have no choice but to accept the services. This may be one of the reasons that, sometimes, the quality of the products and services provided by the public sector is not comparable to those of  private sector. The customers have to accept the fact that we get what we paid for.

Next to doing the right thing, the most important thing is to let people know you are doing the right thing. –John D. Rockefeller. I think this is where public sector miserably failed in the past.

Bicycling in Northern Nevada

Is the skyrocketing gas price thinning your wallet? Are you concerned about your ever-increasing health care costs? There is one solution that can resolve both problems to a certain extend. Yes! Bicycling is the solution. There are so many clubs and resources available to tune your mood towards pedaling. Bicycle events are happening throughout the state. Many people don’t want to ride bicycle in winter time especially in the Northern Nevada. But, I have seen few of my colleagues dress like astronauts and ride bicycle to work during cold winter time. It is certainly not safe to ride bicycle during the snowy days.

The federal, State and Local agencies work hard to encourage people to start pedaling. In the recent past, you would have noticed that many roads in Reno and sparks area are re-striped into bicycle friendly roads. Almost all the future road projects in the urban area are planned to accommodate bicycle lanes. Of course, I am not talking about the Interstate and US routes.

The Washoe County Regional Transportation Commission website has valuable information about bicycling. Click the map that shows the bike paths and lanes in the Washoe County urban area. The City of Reno has its own bicycle information site. Here is a blog by a bicyclist Reno Rambler living Reno NV. I just found the blog when I google for something. If you are bored and have nothing to do this weekend, here is an opportunity to read the Nevada bicycle laws.

We should make sure that we wear a helmet and a reflective jacket when we ride a bicycle. Also it is extremely important to obey all the traffic laws and to respect the signal lights. We have to have front and rear lights in the nights. I love listen music while riding my bicycle.

Marketing the Public Sector

In this blog post, I focus on the marketing efforts of public agencies towards the stake holders, who are the citizens of the country, state, or locality depending on the responsibility of that agency. Public sector is a different animal when it comes to marketing. In the private sector, marketing is a tool to increase sale of the products and services offered by that entrepreneur. That is not always the case in public sector. In many occasions the marketing focuses on educating the stake holders so that they will need fewer services from an agency. For example, health and human services department put a lot of efforts to educate the people on healthy living so that they will need less health care from the agency. Transportation agencies focus on selling products and services such as, transit services, vanpool services so that people will need fewer highways which are high cost investments.

For any organization, whether private or public, marketing is a tool for promoting self-interest. Public sector revenue is mostly from taxes and user fees. In most cases public sector marketing is geared towards increasing revenue, selling policies to the citizens, and educating the people about the consequences of lack of products and services offered by the public sector. The agencies have a responsibility to show the citizens that their money is spent in the most effective and efficient way. Also it the responsibility of the agency to prove to the citizens that the opportunity cost is higher than the taxes and fees they pay. Marketing is a great tool to fulfill these responsibilities.

Marketing in the public sector is very complex and problematic compared to private sector. There are constraints like legislative restrictions and political philosophy differences of elected officials who ultimately oversee the operations of the public agencies. Another problem is that the leaders and politicians often undermine the need for marketing in the public sector, thus no financial and physical resources are allocated for effective marketing. This trend is changing positively in the past few years, but still there is not enough emphasis on public sector marketing.

Transportation and Politics

In the last few months we have heard several voices for and against mass transit systems like hi-speed rails, light rail, and bus transit systems. President Barak Obama and his administration push hard to move forward with the hi-speed rail projects around the country. Senator Harry Reid is supporting the Southern Nevada-Southern California passenger rail project. On the other hand, the newly elected New Jersey Governor Chris Christie and the Florida Governor Rick Scott turned down the massive transit initiatives in their states . If we see the political arena, we will hear a lot of similar voices. What is happening? Why the initiatives of some political leaders are turned down or bad mouthed by others?

2010 House Election Results

A recently published “The Transport Politic” web journal contains some interesting insights. One common thing is that most of the democratic leaders want to go forward with the transit programs while most of the republican leaders want to turn down the transit programs. Now, look at the districts represented by the democrats and republicans. Democrats won most of densely populated areas of the country where transit is needed now or in the near future. Republicans won the lightly populated areas of the country where transit is not a necessity now or in the near future. This is not an absolute fact but a common phenomenon. For example, New York City, the most populated city in the nation, didn’t have a democratic mayor in the recent past. As most of the transit investments will benefit the people who live in cities, stronghold of democrats, republicans know that these mass transit programs will not be beneficial to their rural constituents.

Density and Democratic Votes, 2010 Election

In Europe and Japan, hi-speed rails are very popular. China is now investing billions of dollars in those systems. But we did not focus much on the rail systems in the past except the light rail services in the big cities. None of the rail systems in this county (probably in the world, except Indian railway) run self-sufficient without government subsidy. The ticket fare is usually not even enough to cover the operating costs. Recently published the Pew Charitable Trusts Subsidy Scope Project report indicates that Amtrak receive a subsidy of $32 per typical passenger from the Government.

How Do We Pay for Our Highways?

In the United States, almost all the highway infrastructure is built by the public sector. Private sector plays a major role as the contractors, consultants, bankers, and in some other cases they fund the upfront costs. But the federal, state, or local Governments typically determine which projects to undertake and how much to spend on them.

Highway interchange

Marquette Interchange in downtown Milwaukee, WI (artist's rendering)

The public sector provides most highway infrastructure for several reasons that tend to limit the role of the private sector. First infrastructure is for “public goods”. Such goods are usually not profitable for the private sector to produce, because once they have been produced, they are available to anyone who wants to use them. Second, because such infrastructure is costly to build.  Having competing highway networks is not practical. As a result, such “natural monopolies” are often either provided directly by the government or regulated by it. Third, the benefits of highways may extend beyond the places where they are built and beyond the people who use them directly. All three of those characteristics of highway infrastructure tend to limit the incentives for the private sector to provide it.

Majority of the funds to build highways are derived from the gasoline and other fuel (e.g.: diesel) taxes. Total fuel tax includes federal tax, state tax, and local tax. Federal tax revenue is credited to Federal Highway Trust Fund and then distributed to the states. Many states, including Nevada, have their own Highway Trust Funds. State tax revenue is credited to State Highway Trust Fund in Nevada and this fund cannot be used for any other purposes other than highway construction. Local taxes are redistributed to the county of origin.

In the state of Nevada, we pay, per gallon of gasoline, 15.44 cents federal tax, 17.65 cents state tax, and 6.35 cents county mandatory tax, and another county optional tax that varies for different counties. In most counties, including Washoe and Clark, it is 9 cents. In Washoe County, County tax is indexed to inflation and the current additional tax is 2.67 cents.

Hoover Dam Bypass Bridge

Another significant source of Funding is from motor vehicle fees (e.g. driver license fees, vehicle registration fees), other taxes (e.g. sales tax), tolls, and some other miscellaneous taxes and fees. Tolling for highway use is prohibited in Nevada.

In addition to the above, we pay 2.86 cents of federal gasoline tax for transit services and another 0.905 cents for petroleum cleanup and inspection of imported fuel. They are not used for highway infrastructure construction. Appropriations from the federal general fund also transferred to federal Highway Trust Funds, but most of these funds are used for mass transit operation.

Sources:

Nevada Department of Transportation Facts and Figures 2010.

Congressional Budget Office Economic and Budget Issue Brief, January 2011

AASHTO Center for Excellence in Project Finance

Photo Credit

Photo Credit

I am a Blogger!!!

It is an exciting day for me. I read blogs for last few years which I found fascinating. I was able to read the minds of average Joes instead of hearing from premeditated professional analysts. I was blogging for a few months as part of the course, Management and Organizational Science, I took at University of Nevada, Reno. But, I did not bother about reaching other people with my thoughts except the instructor of the course who graded me based on my blog posts. I never thought I will become a blogger expressing my own thoughts.

I am an employee of Nevada Department of Transportation. I am planning to post what I learned and my experiences whether at work or in my life in this blog. Also I will share the interesting stuff I read and enjoyed. Also I am passionate about the public service and working in the public sector especially in the transportation infrastructure building. I am planning to throw the tales and glories of some great public servants. I am hoping to attract more and more talents to the public sector. Don’t worry! I did not work in the public sector that long, so there won’t be much talk around me. Also I plan to explore the power of social media and look at how to make most out of it to take the public sector to public.

While typing this post, I learned from the Reno Gazette Journal web edition that Cory Farley, a local radio talk show host, is having his last show today. I listen him once or twice a week for last couple of years while I am at home or in the car (On the other days I am at work and I don’t get AM radio signal in my office building). I truly respect his opinions and I will miss him if he doesn’t engage in the radio again. On the happy side, I also learned from the same web edition that Egyptian president Hosni Mubarak finally stepped down after three decades in power. CNN and many other media reported that social media played a major role in initiating and energizing the revolution. The following link is a short video from CNN that examines the crucial role of social media.

http://www.cnn.com/video/#/video/tech/2011/02/11/barnett.egypt.social.media.cnn?iref=allsearch

Following link is an article “Did Facebook bring down Mubarak?” also from CNN.

http://www.cnn.com/2011/OPINION/02/11/sifry.egypt.technology/index.html?iref=allsearch

I have no intention to solve the entire world’s problems through this blog. All what I write are my personal opinions and does not reflect my current or past employer’s or my family’s views.