It underscores how far Cuyahoga County public employment is out of whack.

One of the best ways to compare public employment levels is to evaluate the number of public employees per 100,000 population. When you do that, you can see that Cuyahoga County has higher than the national average in public employment in most categories.

You can view a spreadsheet here.

Where is Cuyahoga County heavy in public employment overhead?

Hospitals: (Most places don’t have a public hospital like Metro Health)

Public Health

Public Welfare

Transit

Water and Sewer

Judicial and legal

Firefighters

Housing and Community Development

Elementary and Secondary School Administration

It’s not chump change

Here’s how you can use these number to get a ball park of the additional costs from a relatively inefficient public sector. Let’s take the Judicial and Legal employment in Cuyahoga County. Compared to a national average the county (all units of government) employs 148 employees per 100,000 population more than the national average. That’s equal to a head count of 1,919 above the national average. (Cuyahoga County’s population is 1.3 million.)

If we assume that the average wage is $50,000 and the payroll burden is 35%, the additional overhead in the judicial and legal function of government is costing county taxpayers about $130 million a year. The water and sewer inefficiencies impose a bloat tax of about $80 million a year. That’s about the same bloat tax we pay for inefficiencies in our fire department. (This includes only head counts and not the costs of duplicate, expensive equipment.) A top heavy school system costs about $36 million a year. Inefficiencies in regional transit cost us about three times that: $110 million a year.

Inefficiencies in housing and community development cost us $50 million a year. (These inefficiencies may be offset by the benefits every neighborhood having a community development corporation, but these corporations can also act as fiefdoms or “door keepers” closing down innovation.)

The lost benefits of scale

We should expect Cuyahoga County to realize some savings from scale. The county is one of the largest in the country. But that’s not happening.

(You can see the slightly downward sloping line on page 14 of the REI report listed below. There’s not much of a scale advantage — government is a service business, after all — but there are some. Cuyahoga County falls way above the line. Our “leaders” are self-dealing and leaving a lot of productivity penalties for the rest of us to pay.)

More on the cost of government

Here’s the web site developed by The Fund for Our Economic Future’s consulting team (data through 2002).

You can read through their report here.

You can read through the report we prepared a few years ago at the Center for Regional Economic Issues here.

Finally, there was a recent report on reorganizing Cuyahoga County government, but that report does not really address the underlying cost of government in the county. Their web site is here. You can view their report here.

The conclusion: We are paying too much for the government we are getting

The iron triangle: Map the Mess

In my view, this situation reflects the insular politics of Cuyahoga County. There’s an “iron triangle” that has allowed this situation to get out of control. The business community, led by the Greater Cleveland Partnership, turns a blind eye to political excess (and the corruption potential of patronage out of control) in exchange for public sector support of leading real estate developments, such as the the Forest City’s relentless steering of the convention center/Med Mart. These connections have led to a lot of speculation about the connections.

But don’t forget Browns stadium, the goofy Cleveland casino “learn and earn” initiative, the Juvenile Justice Center land deal with Forest City, the Jacobs deal on the Ameritrust Tower. The list goes on. Roldo and otehrs have chronicled the abuses.

It’s a convenient quid pro quo and a sad consequence of a business leadership controlled by commercial real estate interests. (The shift away from manufacturing leadership started in the 1970’s with the collapse of the steel industry.)

The Plain Dealer, meanwhile, has largely turned a blind eye to the abuses, bowing to pressure and too close connections to the business community under the previous publisher. (Weak-kneed editorial decisions have not helped the PD’s reputation.)

That might all change now that the PD editors get a brief whiff of a Pulitzer for their coverage of the county corruption scandals.

Bloat taxes power the corruption in the county. The best antidote is transparency and an aggressive corp of professional journalists focusing on big issues.

Meanwhile, we’re steadily putting together the connections over at Map the Mess. We welcome your contributions.

The University System of Ohio is soon to be a global hub for online medical education and videoconferencing following a decision to fund the creation of a resource center in Columbus…

Telehealth is the practice of using telecommunication equipment and computing technology to support long-distance clinical health care, patient and professional health-related education, health care administration and public health interests.

Center Established To Offer Online Medical Education And Videoconferencing To World’s Physicians

How will Cleveland+ participate? How will the Med Mart connect? (See the proposed NYC center’s plans here.)

What’s Hot: ‘Home Grown Indiana’

Visit the web site here.

Meanwhile in Lexington, KY, a new study focuses on consumer attitudes toward local food.

Local Food Study Highlights Universal Concerns

The restaurant is a nice mid-size space with what I can only call an “old school” feel. It reminded me of going to some of the cooler restaurants with my family back in “the day”. This is not a bad thing! It’s just the opposite: it’s a comfortable, warm area where you feel like you are going to eat something special. It’s the opposite of the excruciating “corporate chain” experience…

As for the food? It’s described as “Euro-American Bistro”. The menu had a mix of solid standards and more interesting dishes to please us. We shared a (slightly) spicy shrimp appetizer to start. I had their chicken soup, which could have been considered a stew or a pot pie because it was so thick and savory. The biscuit served on top was amazing. Finally, I had the pot roast and my friend had the smoked-and-grilled salmon. We were both very pleased with everything and left happy.

If you’re looking for someplace to go for a good meal, check it out. It’s very easy to reach, being just north of I-90, where Eddy Road dead-ends into the lake in Bratenahl.

Americano in Bratenahl | Bakaitis.com.

Jones Day is Representing National City and Baker Hostetler is representing PNC. They have jointly filed a motion to stay discovery on the case we filed because they want the matter to be heard in Delaware where the law is more favorable to corporate management than shareholders and where no one affected by the merger lives. This is a bad deal for National City Bank Shareholders. First they were underpaid for their shares. The exchange ratio offered in the Proposed Transaction is unfair and grossly inadequate because, among other things, the intrinsic value of National City’s common stock is materially in excess of the amount offered for those securities in the Proposed Transaction in light of the Company’s prospects for future growth and earnings. In fact, the Proposed Transaction values each share of National City’s common stock at $2.23, an 18.9 percent discount from Thursday, October 23, 2008’s closing price of $2.75. There is a strong argument to make that the future of National City is a lot brighter than they have portrayed in defending the merger.

Political Leaders have also raised legitimate concerns about the possible inappropriate role of Federal Government Regulators in forcing the deal. Further, at the time the PNC deal was reached there were other legitimate suitors on the horizon including one who would have maintained Cleveland as its U.S. Headquarters.

On October 25, 2008, the Cleveland Plain Dealer, in an article entitled “National City Bank is sold; thousands of jobs at risk” stated, in part, as follows:

The news is among the worst that could come to National City, which, according to banking legend, actually originated the first mortgage in the United States. PNC, just 130 miles and less than three hours from National City’s headquarters, was one of a handful of banks known to be talking with National City this month about a possible deal.

Another contender, Scotiabank of Toronto, “would have been the best because you would have kept everything in Cleveland,” Cassidy [Gerard Cassidy of RBC Capital Markets in Maine] said.

A real conflict of interest arises because Corsair Capital will be paid a higher price for its shares and several of its principals voted as members of National City’s Board of Directors to merge.

There are serious legal and factual issues that must be explored before this deal is allowed to close and the most appropriate forum to review them is in Cuyahoga County Common Pleas Court. In this case the interest of National City Shareholders and interests of the community are perfectly aligned.

Here’s a PDF of the complaint Dann filed. Word is Dann is expediting discovery.