Friday, December 17, 2010

Bonanza Column 215 – Who Should IVGID Serve?

In its final meeting last week, the 2010 IVGID Board of Trustees addressed the right question, raised by General Manager Bill Horn. The question was "who are we going to serve?"

Unfortunately, like most good questions, this one doesn't admit of an easy answer. Many would say that the choices are full-time residents, part-time residents, and visitors, but that may be painting with too broad a brush. Still, it's a place to start.

Current figures indicate that about 60% of IV/CB owners and renters would be called part-time residents. That means that, if we go by a simple majority rule, IVGID should be interested first in serving that 60%. I must say that, as one of the 40% who live here 24/7/365 (366 in leap year), I don't find that very appealing. Part-timers need fewer services and generate less revenue for IVGID and local businesses than I do, so maybe it's the full-timers who come first.

Then there are visitors – they may not pay utility or rec fees, but they bring a lot of money into the local economy – skiers, golfers, beach-goers, renters of vacation properties, all pay for those usages and spend money in the stores as well, so we can't really ignore them and IVGID probably shouldn't adopt policies that would turn them to other areas to visit.

In the 15 years I've lived here there has been an ongoing debate about what business IVGID should be in. Many golfers are sure they should not be in the ski resort business, and many skiers don't see the point of their being in the golf business. People find the Rec Center fees too high, but they're generally lower than private clubs, and everybody feels that their favorite activity is subsidizing those they don't use.

Nevada statutes define the responsibilities of a GID as water, sewer, waste, and recreation, and mostly it seems to be recreation that everyone has an argument with. In its role as a utility district, IVGID seems not to be generating much in the way of complaints. In recreation, the prevailing attitude seems to be that the answer to Mr. Horn's question depends on whose ox is being gored. I wonder if that's the best way to approach the question.

In my work with corporations, I see three approaches – companies that deal primarily in "stuff" – auto manufacturers, agribusinesses, oil companies – take the approach of simple accounting – keep costs as low as you can, keep prices as high as is consistent with moving product, and that's about it. The only "soft" consideration is quality – with differences in quality, sales will be a function of price and quality; in a commodities business it's just price, so cost control becomes essential – WalMart has shown that you can do very well with razor-thin margins if you keep costs as low as possible.

The third approach applies to service businesses. These companies have to be intelligent about price, cost, and quality, but depend on service to give them a competitive edge. Nordstrom was one of the pioneers of this approach, and Costco has shown that even in the low-margin, bare-bones approach of a "big box" store, customer service provides a significant advantage.

IVGID, of course, is not a business in the sense I've been discussing – they are a municipal government, albeit one limited by statute. Many of us feel IVGID could do a better job of serving the community if its scope were expanded and it took over many of the functions now under the County's aegis, but the voters rejected that idea in 2008, so we have what we have. Still, if IVGID were to be examined as a business, I submit it is closer to Costco or Les Schwab than to Walmart or Shell Oil or Ford Motor Company. By this I mean that while the quality of IVGID's "products" is important as is its revenues and expenditures, IVGID exists for the purpose of serving the community, diverse as it is in its opinion of what constitutes service.

So Bill Horn's question is exactly the right one and is one that does not lend itself to quick or facile answers. I also would suggest that it cannot be answered, by the new Board of Trustees or by any of us based on narrow self-interest (or the interest of groups we feel are important because they're the ones we belong to). Rather, I would hope that the 2011-2012 Board will take the matter up very seriously and from the perspective of the greatest good for the greatest number. Let's hope they will.

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