Page 2: Simple math
Statistics can lie. We all know that. And sometimes it’s interesting to see what deceptions people can get away with – deceptions that appear all too logical and rational … until they’re more closely examined.
Take the seemingly innocuous discussion Council had Wednesday regarding the fiscal health of CalPERS (Public Employee Retirement System). Councilmember Eastman is concerned that the poor performance of CalPERS’ investments last year will leave municipalities on the hook to pay huge rate increases for the cushy retirement packages of our local taxeaters.
Town Finance Director Brad Koehn insisted that CalPERS had adopted all sorts of “smoothing” mechanisms to lessen the hit, and better yet, CalPERS had experienced 30% growth in its investment portfolio this year, he said. This seemed to assuage Council.
“The numbers do not frighten me,” said Koehn.
“Will you tell us when they do frighten you?” asked Eastman. Everyone laughed. But c’mon, what’s Koehn’s track record? Spotty, at best.
Sounds good, right? 30%. Until you consider this. Say you’ve got $100 invested and you lose 40% on that investment in year one. Gaining 30% back in year 2 doesn’t get you anywhere close to being even. After year one, you’d have 60% of $100, or $60. Gaining 30% on $60 leaves you with $78 after year two. You’re still 22% in the hole, and all the “smoothing” in the world can’t fix that pothole.
Eastman’s onto something. As the Town acknowledged during the darkest depths of the budget crunch, benefits cost the Town over 50% of an employee’s average salary, and it’s more like 70% for a police officer. A local taxeater making $100,000/year actually costs the taxpayer between $150,000-$170,000. So we better make damn sure every time we hire that we REALLY need that employee. Because the effects of that performance of the CalPERS investment portfolio will take years to correct. Even Koehn admitted that CalPERS was treating last year’s results as a “100-year” event. When have we heard that before? Oh yeah, in relation to the Town’s storm drain system. But we’ll leave that for another day.
And from Geisel’s desk …
More flights are bound for Mammoth Yosemite Airport this winter, and with that (hopefully) a demand for more rental cars.
Mammoth Car Rental partner Tom Cage went before the Airport Commission on Monday afternoon to push for the company to occupy one of two car rental desks at the Mammoth Airport, along with charter rental company Enterprise, seeking to renew its lease with the Airport.
The Commission had three options on the table: Enterprise, whose renewal was a almost a foregone conclusion, Hertz as a stand-alone agency with its own storefront, and Mammoth Car Rental and a major flag, presumably Hertz, as a brand affiliation.
Enterprise Regional Manager Doug Flack, whose airport experience includes setting up the Enterprise presence at the San Diego airport, said the company is ready to re-up. “We did have some issues: not enough full-time staff, not enough cars and not the right types. Those issues have been addressed,” Flack said confidently. “Last year we had more surprises than expected. It’s a bit of a guessing game … 70% plan ahead, so you need to build in more room for surprises.”
Commission Chair Pam Murphy said that “all of us experienced growing pains during that first season last winter.” She went on to add her nod of support for a renewal, so long as the company can make assurances they are ready with cars, chains in each one, snowracks and enough full-time staff.
Flack went down the checklist, assuring commissioners those will be in place by the time flights start arriving. “We have 10 different cars this season, from Toyota Rav 4s to Chevy Tahoes and Suburbans, and we’ve ordered more 4WD vehicles,” he said. Flack also added that the company has a revised system for making 1-way drops far easier. “Customers can make 1-way drops from here to Maine.”
As to Mammoth Car Rental, Cage briefed the Commission, sharing the contents of a Nov. 1 letter from Hertz expressing its desire, if not intent, to affilliate with Mammoth Car Rental. Hertz has always been Cage’s first choice for an affiliation, arguably the largest such car renter worldwide. (Enterprise is #2, according to Conde Nast Traveler magazine rankings.) Progress towards a done deal has been slow, however, due no doubt to Hertz’s sheer size as a corporation. “We’re a small application on a very large table,” Cage quipped, noting that Hertz has a 327,000 vehicle fleet, while he proposes carrying 30.
On the upside, Cage hasn’t just been sitting around waiting for the phone to ring. “We’ve been putting plans together all along. We plan to have 18 cars at the airport, 12 in town and 15 spaces reserved at the airport,” he said. Ford Escapes were the 4WD vehicle of choice. “We think it’s the right size 4WD vehicle.” Cage also said the cars will have maps, 24/7 access to Mammoth Chevron (his town base of operations), snowtires and chains, scrapers … the works.
He said a confidentiality agreement with Hertz has been signed, in anticipation of what should be a franchise agreement to follow, and the booking software package has already been identified. Asked about the timeline, which is getting shorter and shorter, Cage was optimistic. “Even if Hertz takes another 3 weeks, we’ll have 18 cars at the airport on Dec. 17 [the day flights first arrive],” Cage stated.
Mammoth Mountain had previously considered contacting Hertz about a partnership, but on Monday MMSA CEO Rusty Gregory was at the meeting and formally announced it was taking that proposal off the table. Gregory, no doubt well aware of his pledge to local businesses — in particular those on Main Street, indicated the move was due in no small part to MMSA’s desire to be supportive of area businesses.
“I want to be clear: we have no conflict with any local competitors,” Gregory said, stressing harmony among businesses that will help get the town “to the point where we’re able to do things like the rest of the world does them.” His only caveat to local businesses: “Locals better be able to do things at least as well as the rest of the world’s distribution system.” He qualified that, however, expressing confidence in Cage’s ability to pull together a franchise agreement, be it with Hertz or another flag brand, which he stressed was vital to the success of such an “enterprise,” pun intended.
He did, however, ask that language be added that Cage make “best efforts” to secure Hertz, and failing that, another major flag brand. Cage agreed to the verbage, adding that he hopes to have a contract by Nov. 15 and target Hertz, then Avis and Thrifty, in that order.
The commissioners voted unanimously to recommend Enterprise and Mammoth Car Rental, including the Gregory-requested language, to Town Council. During its Wednesday night meeting, Council signed off on the recommendation as submitted by the Commission.