It's just not prudent. Certainly. Good evening, Mr. Rickerman, Mr. McDowell, Mr. Duvall, Mr. Vines, Mr. Davis, Mayor Benjamin. Thank you. Everyone please stand for the Pudge of Legions. Pudge of Legions, justice for all. Good job, fellas. They were nervous. Great job, young man. Great job. Reverend McDowell, you have a recognition? Yes. I'd like to introduce Dr. Thurman Bowen, the pastor of the Trinity Baptist Church on Richland Street. He's going to come now and render our invocation. Dr. Bowen. Pastor, how are you? Doing just fine, Mayor. Was thinking, Mayor, as I'm prepared to do the prayer that I've been the pastor of the Trinity Baptist Church for 21 years, and in my meetings, I have our monthly meetings, our quarterly meetings, and we don't have anyone there. And whenever there's a large amount of people in my quarterly meetings, that tells me that something is wrong. And so we're going to pray to all these many people in this meeting that we will come through in a fine, fine manner. Let us pray. Father, we thank you for this awesome opportunity to come together and reason together, and to tell all that you might address the concerns of your people. Lord, we pray now that you would give this council board wisdom and give them knowledge. And these concerned citizens, we pray that you would give them understanding that you would be in the mix. Not only are you a God that's over this country and this nation, but, Lord, we pray that you'll be a God that will rule rest and abide within this meeting, and that, dear Lord, that you are sure of the people of that, that you are still strong, that you are still God. And we thank you, dear Lord, for this leadership. I guide them in a way, dear Lord, that will surpass all understanding, in a way that will certainly be designed to look for the needs of the people. So we pray, dear Lord, that this will be the very thing that will be done on this night. So calm them down. Calm us down. Let us reason together. And we pray for your presence, your spirit, my name matches the name of Jesus, the risen Christ. We do pray. Let us say amen. Amen. Thank you, Reverend. Thank you. Thank you. Thank you, Pastor. Thank you. I'm city manager. Yes, sir. I'm going to move the agenda with the pastor. It's amazing you referenced the prophet Isaiah. Come, let us reason together. We were just talking about that in the back room. And due consideration, discussion with the neighbors in the VISTA, the VISTA Neighbor Association and the developers, we're going to defer item 41 for two weeks in the interest of everyone talking together again. We actually, I thought, had a good and productive meeting last time. Did you see more of that? And that's something that's incredibly important to Reverend McDowell. And to make it clear, we're going to act on this in two weeks. We're not going to talk about it anymore. So let's see if we can get some good discussion. So I'm not sure if it's prudent now or after approving the agenda. But we can approve the agenda with the deferral of this for two weeks. All right? So that is a motion by Mr. McDowell. Is there a second? Second by Mr. Davis. Any further discussion? Seeing none, we'll move the previous question to Kurt Calderon. Mr. McDowell. Mr. Duvall. No. Mr. Vine. Mr. Davis. Mayor Benjamin. Aye. All right. Thank you, Mr. Mayor. Thank you, ma'am. At this time, we would ask for any public input related to the agenda items as outlined. No. It's important that we do want to make sure some of you were here earlier at the work session. We're not going to be voting on the health care plan tonight. What we're determined to do is we're going to move forward with the budget. And the budget's going to set out some fairly clear financial parameters that we're going to have to back into. What the health care plan looks like going forward is something we're going to continue to dialogue. I'm not sure if we've got a clear date as the question that Howard asked earlier about when we'd have to make some decisions. But some of our leaders at the CFFA and others offered to help and sit around the table as we fashion what that plan looks like within the parameters of what we know we need to do financially to manage our long-term act share or liability. We're going to do that. But the budget, Mr. Mayor, or as proposed, is reflective of maintaining the DDB and the 820 cost here. We will maintain the DDB. We must maintain the DDB. For those of you paying attention to the financial side of this, if we do not maintain a defined dollar benefit, then our long-term act share or liability will balloon. It will balloon. It will climb to $380 million. More than double what it is now. By 2047, it will exceed $1 billion. It's not sustainable. Not sustainable. And we have to continue to adjust accordingly to meet just demands of the market. We're also going to have to make sure that we step up and really start pushing some hard and fast requirements around our health and wellness initiatives, participation in those initiatives, looking at biometric screening, making sure that we can catch chronic conditions early on. There's a whole lot more that we're all going to have to do to make sure we keep our eyes on costs. But yes, we are going to maintain the DDB and we're going to make sure that our employee premiums are reflected 80-20 split that we discussed. But we won't be voting on the specifics of our plan tonight. And that's just important. And some of you obviously have other things that you need to be doing, but we won't be doing that tonight. The Mrs. Benjamin's presentation she gave today is available online already? Yes, it is already. If it isn't already, it will be. Yeah, and if there's some way, it might even be prudent. It's already. Yeah, and it might be prudent as well. You can go online to columbiasse.net, but maybe if there's some way in which we can maybe send it out to all existing employees and whatever network exists to send it out to retirees, let's make sure it gets out there so people can can pour forth through it in a more personal manner. Ms. Devine? If there are no, if there's no other input, Mr. Mayor, related to these agenda items, we would ask council to approve the consent agenda items nine through 29. There's a motion. Okay. There's a second. Second. Any discussion? Seeing none, we'll move to the previous question. The clerk call the roll. Mr. Mcdowell? Yes. Mr. Duvall? Aye. Mr. Devine? Aye. Mr. Davis? Aye. Mayor Benjamin? Aye. Thank you. Three. Three. We would ask that as you depart, if you would please keep it down just a tad bit. Madam City Manager? Our first presentation, Mr. Mayor, is the recognition of Mr. Robert Harris as the Richland School District One, teacher of the year, the honorable Tamika Isaac Devine to make the presentation. All right. Thank you, guys. I just wanted to, couldn't let the school year in without recognizing Mr. Robert Harris. Mr. Harris is the Richland One teacher of the year. He also was a finalist for the state, Mr. Mayor, he also was a finalist for the state teacher of the year. And although he did not bring that recognition back to Columbia, we know that we are so lucky to have Mr. Harris in Richland One teaching our students. He is a teacher at Hand Middle School and Mr. Mayor, he is so innovative. I just, I follow him on Twitter and I see the things that he does with his students and he certainly is a rising star, not just in education but just I think in this state and he is framing the minds of our young leaders and we just couldn't be prouder. So if he would come forward and council has a small presentation for you. Good evening. I would just like to thank you all for the recognition this evening. Thank you all for honoring me on tonight. And on behalf of Richland County School District One, I would like to thank you all for your hard work and your commitment and dedication to education in Columbia and in Richland County. So again, thank you all so much and I appreciate all the hard work you all do every day. Thank you. You did a great work. Appreciate it. Our next presentation is a Business Spotlight Honorary Recognition and Proclamation. Ms. Melissa Lindler, Director of the Office of Business Opportunities. I'm a little short. Is that good? Thank you so much. Tonight what we wanna do is recognize Need-a-Lift Transportation Services as our 2018 quarterly business spotlight honoree. We actually recognized her at during our small business conference that was held on May 3rd this year, our largest one yet for the city. But we also went and make sure we brought her before council so you would have a chance to meet her and hear about all the great things that she's doing. Need-a-Lift Transportation Services has been in existence since March 2nd, 2007. So for the past 11 years, she's been providing safe, reliable transportation services to the school districts, both Richland One and Richland Two, after school programs, pick up, drop off, doctor's appointments. And she also does great community outreach. She's very supportive and active in her community. She has provided in-kind support to schools, community organizations, charitable organizations, as well as sponsoring 40 families to participate in the Warrior Warehouse Project. So we're excited that she's here today. And we have a very brief video to show a little bit more about what she does as she's here with us and her staff. Need-a-Lift Transportation Services, LLC is located in Columbia, South Carolina. We are a premier transportation services for families on the go. I started Need-a-Lift in 2015 because I as a parent needed a lift, needed someone to pick my children up from school and allow me to be at work. So Need-a-Lift provides transportation to and from school and after school programs and summer programs and activities for children ages K through college age students. We also provide transportation for adults and senior citizens. Need-a-Lift serves families, schools, nonprofits and government agencies throughout the village. We provide transportation for school, after school activities, field trips, food leisure trips, special events, jobs and internships for our high school students. We also provide transportation to doctor's appointments and also for community sponsored and corporate events. Why choose Need-a-Lift? We are a safe, trusted and reliable transportation for families on the go in the village. You can find us, Need-a-Lift at www.needaliftsc.com. You may also email us at info.needaliftsc.com. And please follow us on Facebook, Twitter and Instagram. At Need-a-Lift, we would like to thank the City of Columbia Office of Business Opportunities, our parents, our clients, non-profit organizations that we serve. Thank you for patronizing Need-a-Lift.  Thank y'all so much. Thank you, Melissa. With the Need-a-Lift team, please stand. I am a firm believer that teamwork makes the dream work. So without the Need-a-Lift family, we would not be able to serve our community. I wanna say thank you for the opportunity to be here to present Need-a-Lift. Also, we are so grateful for the opportunity to serve our families in the community. We're even honored to work with non-profits and different agencies throughout Columbia and South Carolina. So thank you. I absolutely appreciate the opportunity. Thank you. Lucenta, thank you and obviously, you're a wonderful entrepreneur, family of entrepreneurs do a lot of great business in and around the city. But I think it pales in comparison to the community work you do and the community leadership you provide. And we think that's obviously the real son of a great corporate citizen. So thank you for all you do. And we're proud to recognize you as the business spotlight honoree of the corner. Thank you. Lucenta, one of the things you did mention, the mayor mentioned your community service, but you also have, you've started something called Gift-a-Lift so that if somebody has a senior or child that might need transportation that people can gift a lift as well. So that's a plus as well. Ms. Devon, our next item is the recognition of Kauffman Road Elementary School as the 2018 Spring Clean Stream Columbia Award, Clean Stream Columbia Award recipient, Ms. Dana Higgins, Engineering Director for Columbia Water. Ms. Higgins, how are you? How are you? Hi, Dana. No, this is Dana. I'm Jasper. Hey, Mike. I'm a storm water manager. City of Columbia, Columbia Water, we'd like to present the Clean Stream Columbia Award for 2018 to Kauffman Road. They should put the mic up, Mike. Put the mic up, Mike. Kauffman Road Elementary School. They've installed, and they've already started installing and will continue to install Interactive Children's Garden. It includes vegetable garden and composting area. It uses rain barrels to harvest rainwater in order to water the plants. So we encourage this because it uses stormwater as a resource and it reduces stormwater runoff and erosion from the property. So we'd like to present this award to them. We have Ms. Karen Oaken, the Assistant Administrator, Amber Melbourne, the parent volunteer and Sean Hall, the school principal. Oh, my God. That's awesome. Let me grab a photo together. Let's, let's, yeah, please. All right, Madam City Manager. Yes, sir, Mr. Mayor. At this time, we will move into a budget public hearing. Ms. Missy Kauffman, our Budget and Program Management Director will come forward as we do an initial presentation, incorporating into these items, Mr. Mayor, in your first reading. Again, the effort to maintain the DDB and keep the 80-20 cost share reflective of health insurance at the right time, I will read items 34 into the record. Please do. I'm sorry, I'll open up for public hearing. Yes, sir. Missy, you'll present for us. Good evening, copy of the presentation. There's copies available in the back if anyone would like to copy. So today we are here to talk to you about the FY 2018, 2019 proposed budget for the City of Columbia. We will be discussing the general fund, our enterprise funds, special revenues and the capital improvement program for our enterprise funds this year. The total budget for the operating budget for the City of Columbia is 346 million. This comprises the general fund, parking funds, stormwater, water and sewer and hospitality and accommodations tax. These are just our water, this is just our operating funds, not the capital improvement program. This represents a 5% increase over the current year budget for our total operations. The budget development goals for this year included a resilient budget, being able to provide services today and preparing for the long term. That means ensuring that services will continue and that the City will operate within its means. This also means reevaluating priorities and programs in order to free up and reallocate resources as well as identifying new resources to help launch new programs to tackle emerging challenges and enhance current programs that need additional resources. A balanced budget, sustainability is our next goal and that's moving beyond just a budget that is balanced. A balanced budget is required by law. A sustainable budget is a choice and seeks to establish spending and reserve practices that are sustainable. Providing quality services, providing high quality municipal services efficiently and effectively and responsibly as a basis for why we are here. Providing high quality services is to do what requires also mean that we invest in our employees and infrastructure and maximize overall organizational efficiencies. The $346 million operating budget for the City builds on the City's efforts to responsibly meet the resident's basic needs for municipal services while at the same time introducing creative and innovative ways to deliver services to meet the goals of Envision Columbia's strategic plan. I know it's hard to see from here, but this budget includes services for over 133,000 residents, over 5,000 businesses, 2,400 employees. It also includes our water and wastewater operations. There are two water plants and our wastewater plan is along with many other infrastructure and facilities that are provided by the City. Envision Columbia, just as a reminder as well for our budget development, is influenced by the Envision Columbia seven focus areas and five goals. We'll move right into the general fund. The general fund budget is in balance. It's 148 million. It's an increase of 5.4 million or 4% over the current year. It's being proposed without a property tax increase. This budget reflects funding to maintain the current minimum service levels. Growth is limited to increases for costs of operations, general inflation, state retirement rates, employee merit program, capital replacements, and annualized costs for previously established programs. Looking at general fund revenues, revenues total 129.3 million, an increase of 2.6 or 2% over the current year. The largest increase is that from property tax revenues based on growth in our assessments. Transfers in include capital lease proceeds of 8 million, which is increased to reflect annual target amount of 8 million. And there's also a use of fund balance of 1.7 million right at 1.8. It's a reduction of 1.2 from the current year. And that is in part to help us to support our goal of financial sustainability. General fund departments total 124 million, which represents an increase of 1.2 million. The general fund includes the community department, community development department, the general fund portion of it, fire, general services, general government, office of business opportunities, parts recreation, police and public works. General government encompasses public finance, administration, IT, general services, and other operations that support our basic services. As you can see, the largest portion of the general fund budget is our public safety. In addition to our departments, what also makes up the general fund is our non-departmental totals, which is 6.3 million. That includes our lease payment for the capital lease replacement program. It also has that we are maintaining our current levels of funding for the external agencies of 1.9 million. That includes the Alvin Escalade Detention Center of 600,000, Public Defender of 100,000, Solicitor at 215, and the homeless services contracts is maintained at 1 million. Transfers out total 17.8, which is a 3.2 million increase, or 22%. That increase is really attributed to, and I've repeated it, I know, several times with regards to the 8 million in our capital lease program. That program includes replacement of over 60 vehicles and heavy equipment, includes items such as a replacement ladder truck, a reserve engine, three-side loader trash trucks, and 22 patrol cars. Of course, there's many more items than that, but those are some of the higher-ticketed items in that program. That $8 million is a 4 million increase over the current year, but 8 million is what we have projected as a need for multiple years going forward. There's more of that 8 million, more than 5 million is for funding for police and fire equipment. The budget for this year does not include any funding for general capital projects. That would be the CIP for the general fund in our city facilities. Representatively, just to demonstrate the property, the general fund revenues, 41% of a dollar in this instance would be attributed from property tax. The next largest percentage would come from licenses and permits. Expendenture-wise, the largest portion, again, goes to public safety. Next would be public works and parks and recreation. Moving on to our enterprise funds. Enterprise funds include our water and sewer operations, our stormwater operations, and our parking fund. We'll start first with the water and sewer operating fund. This budget is 161.9 million, and is an increase of 9 million or 6% over the current year. It does include a proposing of a 9.76% increase. Revenue increases applied both to the water and the sewer side, and the revenues generated from this increase are applied to funding the operations and the capital obligations. It's a balanced approach to meeting the utility operations for both operating and capital. And of course, it seeks to maintain the target debt service cover of the ratio of 2%. 60% of the revenues that come in to the water and sewer system come from water sales, and 38% come from sewer sales. Percentage-wise, looking at the overall department's budget, the budget for the water and sewer system, operating departments make up 58% of the total budget, next followed by debt service. The chart on the right, the pattern on the right with department's budgets demonstrates that 71% of all the department's budget uses for our utility budget funding, utility funding, that would incorporate the water treatment plant, the wastewater treatment plant, the operations, and the other staffing that is associated with maintaining of the system. Water and sewer budget, again, is proposed at 161.9 million, just to point out that the capital improvement program is 120 million, and includes the operating budget includes a transfer of 21.5 million from operations to the CIP, and the remainder of the funding for the total CIP, which is in addition to the operating budget, is coming from bond proceeds. The stormwater budget, revenues come primarily from almost entirely come from the stormwater fees. Expenditure-wise, there are several different departments that make up the stormwater fund, including Public Works, which includes storm drains, and those folks who maintain and help construct storm drain infrastructure, the engineering services, and then, of course, now with the debt program for the stormwater program, we do have a reserve that's required, and then we have debt service, of course, that covers. Let's give some slides. Jumped a little bit. Okay, so this is the impact of the utility bill increases on a residential customer, average use. The 9.7% increase reflects about $5.36 per month increase based on an average use of 800 cubic feet, or right at about 6,000 gallons a month. Most of that being sewer, not water. That's water and sewer combined. Most of that, the vast majority of that being sewer, yeah. And then looking at the city's water and sewer rates in comparison to our counterparts, we still remain some of the lowest in the region. And the existing rates are just compared to proposed rates, keeps us still in that same line. Sorry, these slides got a little out of play. So the stormwater budget is proposed at 13.4 million. It's an increase of 836,000, or 6.6% over the current year. It reflects the continued proposed rate increases for the stormwater, the aggressive stormwater program that was adopted last year. The rate increase is 74 cents per equivalent residential unit, basically per month on a residential property. So the fee will go from 11.80 to 12.54 per month. The total capital improvement program for the stormwater system is 11.3 million. That increase helps to fund the CIP program for the stormwater system, as well as the total 93 million that's proposed over the next three to five years. Some of the activities that have occurred to move that program forward is the hiring of a program manager in March and the bond ordinance for the first $50 million issue was approved in April. Moving on to the parking fund. Revenues for the parking fund come primarily from street meters, our garages and lots, and then non-moving violations. Those would be those parking tickets that we're all occasionally subject to receiving. Expenditure-wise, parking services makes up the largest portion, which those would be the folks that help operate the parking system. Debt service carries also a large portion of the budget in the next would be parking facilities. Those are the maintenance of the parking garages and facilities. The proposed budget is 8.6 million and is increased to 684 or 9% over the current year. As mentioned, the revenues come from parking garages, lots, and non-moving violations. The increase is coming primarily from the passport parking system in addition to new and enforced parking service contracts. The department's budget's total 4.9 million, a right at 5 million, which is an increase of 678,000 or 16%. It does include two additional positions in the addition of an annual, the contract for the passport program. Some of the activities will include painting of at least one garage and then routine cleaning of all the garages, schedule and maintenance. Part of the operations will include partnering with economic development to assist with attracting businesses to downtown. Next, we have our special revenues. This includes the hospitality tax budget, which is proposed at 12.1 million. It's about an increase of 557,000 or a right at 5% over the current year and is in line with prior year collections. Revenue collections to date are in line with the projections that we've made, so we're comfortable that we will see this growth in the 18, 19 year, compared to where we are with collections for 17, 18. Just to reiterate on the proposed hospitality tax budget, this includes just the budget, does not make allocations within the allocation, within the line items or with the agencies that are being funded. This is just the total amount of the budget that is being requested for adoption. Accommodations tax is total of 2.5 million, right at 2.6. It's an increase of approximately 370,000 or 16.6% over the current year, with a 4% increase over the prior 16, 17 actuals. We are a little more aggressive in our collection projections for this next year, just based on what we have been seeing in terms of collections coming in from the accommodations tax. Those revenues are generated and received by the state of South Carolina and redistributed to the city. There is obviously some limitations on how those funds could be spent as there are with also with hospitality tax funds. 25,000 can get at the general fund, 30% for advertising promotion of tourism, 65 for tours and relating expenditures, and then 5% for general fund purposes. Or general purposes. Again, those allocations are not made in this budget. It just assumes it's just requests for approval of the total budget as submitted. Finally, we have our capital improvement program for our enterprise funds, which would include water and wastewater, as well as stormwater. The CIP for 18, 19 full wastewater the total CIP is 120 million for both water and wastewater, of which 80 million is for wastewater and 40 million is for sewer. Of that program, 31% is for capacity related projects, 40% is for recap related projects, the other is for treatment plant utility relocation and then other. On the water system side, the meter systems improvements the 70% that would include the AMI and AMR applications, as well as relocation for SCDOT utility relocations, system expansion and then water quality. As mentioned previously, the water and sewer CIP is funded with 21.5 million in the operating fund transfer from the water and sewer system. The rest will come from bomb proceeds. This is, wasn't really expecting folks to be able to see this map from here, but there are of course copies available of the map and the CIP projects is attached to the budget ordinance. This is the water project maps. Here are wastewater. Next we have the stormwater capital improvement program. Again, it's budgeted 11.3 million. And in looking at the projects, the way we categorize these projects for demonstration graphically includes that where the projects will benefit which branch, 50% will benefit the Rocky branch system, 14% will benefit the Gills Creek, 33% Smith branch and 3% 8 mile. And here is a demonstration of the stormwater project that includes projects from this year and the current year. Concludes the budget public hearing. Do you wanna take time to thank city council, thank the city management and city staff as well as the citizens and input for this process. Thank you. Is there any questions? No, the, this public hearing's open, all right. May I have one? Just one question for Missy, because I know last year we were doing phase one of the AMI this year, it's two and three. Just realistically, when can citizens start seeing that? That's probably a question we'll defer to the project managers on that process. I'm sure they can come up and provide some input. So we anticipate bringing a proposal, a contract to council in September. That is our schedule, propping up the communication network this fall and meters being changed out early next year that's starting to change out meters. It's about a three year process. So there'll be a three year contract at the end of that three years we'll have a communication network. Every residential meter will be replaced. We'll be rolling out our application where customers can track their water usage and that soft rollout will begin early next year as well as the meters are deployed. So that's kind of our tentative schedule. Thank you. All right, other questions for Missy? We've got the budget, no tax increase, continuing investment in clean drinking water, storm water and wastewater improvements and continuing investment in other programs that matter. All right, good progress. Anyone from the public have any input on the budget presented? Is there a motion? Move. Second. Mr. Mayor would you like me to read out? Please, would you please? Yes, sir. And Mr. Mayor, I was advised to just incorporate for the record again the healthcare related. Yes, ma'am. With the DDB. The ordinance is ordinance number 2018-026 to raise revenue and adopt the budget for the city of Columbia, South Carolina for the fiscal year ending June 32, 2019, which will also incorporate Council's motion to maintain the DDB for healthcare coverage as well as 80-20 cost share. Move. It's already been moved and seconded. It's been moved and property seconded. Discussion? Seeing none, with a previous question, clerk Calderon. Mr. McDowell. Mr. Duvall. Aye. Mr. Devine. Aye. Mayor Benjamin. Item 35, ordinance number 2018-025, amending the 1998 code of ordinances of the city of Columbia, South Carolina, Chapter 15, Parks and Recreation, Section 15-5, User Fees, A, Definitions, Three, D, Parks, Three, Insert, Keenan House, Four, Earlwood Community Building and Five, Eau Claire Print Building, I, Athletics, Fee, Four, Swimming, J, Classes, Camps, Programs, and to add ill event vendor fees. It's their motion. It's their second. Second. Any discussion? With a previous question, clerk Calderon. Mr. McDowell. Mr. Duvall. Aye. Mr. Devine. Aye. Mr. Davis. Aye. Mayor Benjamin. Aye. Item 36, ordinance number 2018-027, amending the 1998 code of ordinances of the city of Columbia, South Carolina, Chapter 23, Utilities and Engineering, Article 5, Water and Sewer Rates, Section 23143, Water Service Rates, and Section 23149, Sewer Service Rates, A and B. Great. They'll move. Second. Any discussion? Move the previous question to clerk Calderon. Mr. McDowell. Mr. Duvall. Aye. Mr. Devine. Aye. Mr. Davis. Aye. Mayor Benjamin, Item 37, I would ask that you open another public hearing regarding resolution number R-2018-037 in support of the issuance of the South Carolina Jobs Economic Development Authority of its Revenue Bonds or Notes, Columbia International University, in one or more series, in one or more years, pursuant to the provisions of Title 41, Chapter 43 of the Code of Laws of South Carolina, 1976, as amended in the aggregate principal amount of not exceeding $10 million. Right. Move to approved. All right. Well, is that a second? Second. Yeah, move and second. Second. This must be in district one. Those that rules North of Elmwood Avenue. Is anyone from the public who wants to speak in favor of or against this? Move to a previous question. Clerk Calderon. Aye. Mr. Devine. Aye. Mr. Davis. Aye. Item 38, an ordinance second reading, ordinance number 2018-022, consenting to the inclusion of property in a multi-county industrial business park. Project RAIN, 1087 and 1115 Shot Road. I move approval. Is there a second? Second. Discussion. Mr. Duvall. Mr. Mayor, I am opposed to this particular. I'm opposed to this because this is another start of tax breaks for student housing in the city of Columbia. This one give a 33% rate, tax rate cut for student housing. I think that we struggle to balance our budget each year. And if we continue to give tax breaks to people that will come here anyhow without the tax break, we'll never get out of this hole. This developer bought the property, had the property annexed into the city. And until about two weeks ago, we didn't hear anything about asking for a tax break. And now we are looking at giving a tax break. So I don't think we should continue down this road of giving tax breaks for student housing. Thank you, Mr. Duvall. And I respectfully disagree. Prior to the incentive we put on the table a few years ago, there was only one deal. When we put on the table, the sun set it, we've had a quarter of a million dollars worth of investment in that space that over the next 20 years are going to send $100 million rich in school district one. We're going to be able to disagree on policy and I think respect for disagree. But I think this adds 6% commercial property to tax rolls and it's moving in the right direction. But I respect your ability to disagree, Mr. Duvall. Thank you. Thank you. I just wanted to say I've actually publicly stated a similar position to Mr. Duvall's that I felt like it was a good deal. When we sun set it, that was going to be it. And I wasn't planning to support any future student housing incentives. However, with this project, I know that the county is very interested in that and in light of us working together with them to continue to develop our city, I will support it. But I also want to say, and I've asked Ms. Wilson and Ms. Knox and Ms. Said to meet with me in the coming weeks, I plan to bring forward some proposals for similar incentives for affordable housing or mixed use housing or workforce housing within our city. We've talked about it for a while. We've not put anything on the table. And so I'm going to support this in anticipation that we will do the same very shortly for some other areas of our city for some citizens who really need some quality of workforce housing. Let's put it on the next agenda, if we can. We'll move the previous question clerk on the roll. Mr. McDowell? Mr. Duvall? No. Mr. Vine? Hi. Mr. Davis? Hi. Mayor Benjamin? Hi. Thank you. Mr. Mayor, ordinance's first reading, ordinance number 2018-023, granting an encouragement to the Eastlake Homeowners Association for Installation and Maintenance of a Wooden Privacy Fence within the right-of-way of the 100 block of Fountain Lake Way adjacent to properties located at 124 Pine Mass Courts, 128, 132, 136, 140, 144, 148, 152, and 156 Pine Mass Court, Richland County. Second. Discussion? The previous question clerk on the roll. Mr. McDowell? Mr. Duvall? Hi. Mr. Vine? Hi. Mr. Davis? Hi. Mayor Benjamin? Hi. Item 40, ordinance number 2018-028, granting an encroachment to the city center partnership for installation and maintenance of a steel bicycle repair stand within the right-of-way area of the 1,300 block of Main Street. Is that second? Second. Any discussion? Those were the most detailed plans I've ever seen for a bicycle repair rack. Took up about 16 pages. We move the previous question. Clerk on the roll. Mr. McDowell? Mr. Duvall? Hi. Mr. Vine? Hi. Mr. Davis? Mayor Benjamin? Hi. Item 42, resolution number R-2018-044, certifying the Robinson Building as an abandoned building pursuant to the South Carolina Abandoned Buildings Revitalization Act. So move. Second. Second. Is there any discussion? Seeing none, we'll move the previous question on the clerk on the roll. Mr. McDowell? Yes. Mr. Duvall? Hi. Mr. Vine? Hi. Mr. Davis? Hi. Mayor Benjamin? Hi. I'm sorry, Mr. Mayor. Item 43, resolution number R-2018-045, certifying the Martz Building as an abandoned building pursuant to the South Carolina Abandoned Buildings. I move approval. Second. Discussion? Seeing none, we'll move the previous question on the clerk on the roll. Mr. McDowell? Yes. Mr. Duvall? How would I say I? Mr. Vine? Hi. Mr. Davis? Hi. Mayor Benjamin? Council will be moving into a period of appointments. Ms. Belton may come forward to assist on items 44 and 46. Item 44 being the appointment of two individuals to the Columbia Museum of Art Commission. And item 46 is the appointment of four individuals to the Planning Commission. All right. All right. Art Museum? Mr. I'm recommending Mr. Wendell Brown. Wendell Brown. Let's move forward with that one nomination right now. And did I get with you? Yeah, let's move forward with him to fill the resign term of Mr. Rogers and hold off on the other one. All right. All right. I would move. Let's keep that one open. Let's do Brenda Wheeler as a second appointee. And Ms. Belton, we've got Catherine Davis. We already moved that one. So Wendell Brown and Brenda Wheeler. I just want to add Catherine Davis is on here, but she's expiring. And she's already served two terms. So according to our policy, she's not eligible for reappointment. But I don't want the same thing to happen with another appointee that they said they felt like they were just kicked off. So I think somebody needs to communicate with Ms. Davis. And we need to recognize her and thank her for her service for the two terms, but make sure she understands she wasn't eligible for reappointment. All right. So that was Wendell Brown. That was, yeah. Brenda Wheeler. Move a previous question and court call roll. Mr. Vowell, Mr. Gouvol, Mr. Vine. Hi. Mr. Davis, Mr. Mayor Benjamin. Hi. Sorry, one more on that. Ms. Brown, if maybe we could talk to the leadership over at Columbia Museum of Art. I do know Ms. Davis has been heading up their African-American outreach and that whole component. I'm not sure if there's an ability for her to serve in that as ex-officio or if there's an ability for us to kind of keep her in that, because I think she's done an amazing job with that outreach and some of the programming they've had recently. And I'd hate to lose that. Mr. Vowell, have you got a motion on judges? Associate municipal judges with the term of four years and Brian Jeffries as a substitute associate municipal judge with a term of two years. I move also to appoint Christie Grafton Goldberg as an associate municipal judge with a term of four years and Richard Morgan as a substitute associate municipal judge with a term of two years. All appointments are effective July 1, 2018. Second. Second. Is there any discussion? Seeing none, we'll move to the previous question. Clerk Calderon. Mr. McDowell. Yes. Mr. Duvall. Mr. Vine. Aye. Mr. Davis. Aye. Mayor Benjamin. Aye. And I would move to appoint Judge Steeley Bogan as chief administrative judge for the municipal court of the city of Columbia for a term beginning July 1, 2018. Move to the previous question, Clerk Calderon. Mr. McDowell. Yes. Mr. Duvall. Mr. Vine. Aye. Mr. Davis. Aye. Mayor Benjamin. Aye. All right. Planning Commission, I move the reappointment of April Glen James, the reappointment of Richard Cohn for a final term, the appointment of Issa Mandel and the appointment of Brian Dofan to the Planning Commission. Second. Issa wasn't already on there? Oh, OK. Second, though. The previous question, Clerk Calderon. I'm sorry. Issa Mandel is on the, Dr. Mandel, she's on the Historic Columbia board. But she understands that she cannot serve on both. Yes, she cannot serve on both. Exactly. She cannot, which will now have a vacancy on Historic Columbia, I guess. Cohn, James, Mandel, and Dolphin. I think it's actually Dolphin. Second. Discussion? The previous question, Clerk Calderon. Issa, do you need some clarity? It sounded like we need some clarity. Did you need something? You sure? OK. All right. Mr. McDowell. All right, we clarified. Yes, sir. All right. Thank you. Yes. Mr. Duvall. Mr. Vine. Hi. Mr. Davies, Mayor Benjamin. Hi. I would just say to reiterate the concerns that we've raised over the last few weeks regarding our, mainly our land use boards. Then the new members will have to go through training. We need to probably send all members back through training. But I think Ms. Hampton, if we could make sure that it's communicated to all of our land use boards that they are sitting and representing the city of Columbia. They need to hear people out. They need to be respectful. And they need to follow the law. And when do we have, when does DERC come before us? All right, all right. And BOSA, don't we have BOSA come? All right, both on the 19th. OK, thank you. Planning, what about? All right, are there any items, Madam City Manager, from the, well, that's the best. What about us? Planning, I'm sure, when they're done. We're done. Any items, no work session items? OK, they've all been considered early in the agenda. Any reports or referrals to committee? Move your adjourn. Any reports or referrals to committee? We do have a couple of citizens who sound to speak on items that haven't been previously considered. And if they're still here, I'm going to ask them to speak. Mr. Ted Holtzman, if that's right, Mr. Holtzman, want to speak about the H grant issue. And everyone else here is insurance, health care, UG Street, and maybe Mr. Mostafa as well. Only two have signed this week. Please, close your eyes for three minutes, Mr. Holtzman. Yes, Mr. Mayor and Council. My name is Ted Holtzman. I'm here on behalf of Dr. Rajaluri, the founder and directory of the Columbia International Festival, the unique event that defines and promotes who we are as a city, a diverse and vibrant community, bringing together people from more than 100 cultural groups showcasing the multicultural nature of our city. So Raj asked me first to voice his appreciation and thanks for your ongoing support over the years to make the Columbia International Festival possible. And April next year will be the 24th event in this ongoing saga. South Carolina's largest international event and likely the largest in the entire southeast of the United States. But Raj further asked me to voice his grave concern regarding the tacit statement of low value with which this body has assigned to the festival. Last year it was granted just $22,500, placing it below the 40th most important recipient of H tax grant funding. Members of the council, this seems far out of proportion for an event which uniquely portrays and promotes cultural awareness and mutual appreciation that lead to better community relations between South Carolina's native and foreign born visitors and citizens. So when the time comes to make council allocations, Raj asks that we please put our H tax grant wallet where our mouth is a sign of dollar value that is commensurate to the value you place on us as a community with all its rich cultural, ethnic and linguistic diversity. Thank you. Thank you. Thank you very much. Mr. Mustafa. Mayor Benjamin. Yes. Councilman. Thank you for allowing me to speak in front of you. I am the vice president of the Columbia local organizing committee. I'm here on behalf of not only myself, but the community as a whole in regards to racial profiling. Okay. I myself on May 27th is a victim of racial profiling. I went through the protocols. Through all the protocols. I had a meeting today with the chief and I wasn't pleased. And I told your chief that I will be organized and once my people come from Seattle, Washington, we will be organized to protest in regards to the city of Columbia. Police department. Okay. Move on, move on with that. There's an issue with young men driving dodges, dodge charges, they've been targeted. So we need to take a look at that. Young men driving dodge charges. And I'm coming from the community perspective. This is all the complaints. Also, we have an issue with the co-enforcement division in regards to poor people not being able to renovate their house and et cetera. And as a result of that, their house has been taken away from them. So we have another issue also with that. In regards to profiling, if we take a look when I left from the chief office this morning, I stopped to the traffic court. When you look into the traffic court, the reflection looked like us. Okay. Extremely us. That's profiling. It's been a history. The police department in our community has been terrorizing our community over 100 years. And we don't really have a good relationship with a good ran for. We're trying to build one. So we ask that you allow the local organizer committee to sit down because we're grassroots. We're grassroots. So it's time for us to be at the table and the community has not been at the table. Solutions. When I look at the police officer, where are they from 21 to 30? Where are the Asian Latinos in young blacks? We don't have them. Senator Scott, we had to meet with Senator Scott in regards to the Booker T Washington area open colony in regards to building a community center. Senator Scott stated that he gave the city $307,000 to start this particular community center. We want that community center in that particular area. Our people need it. The young folks need it. In regards to the area of colony, there's plenty of complaints about the police officer come to colony with a group of young men when they're walking together, breaking them up. Breaking them up. Don't want them walking together. That's our culture. Why can't they walk together? So these are complaints coming from the community. Again, we're grassroots. And we want to be at the table in regards to this particular issue. And I'd like to get with you in regards to my personal issue with racial profile. So we won't have to bring this public attention all the way from Seattle to Washington. You're welcome to come from Seattle, my friend. We have porous borders. And I'm always willing to listen to anyone's complaints. If you are in the borders of the United States of America, you're welcome to have your positions heard. Happy to talk with you. I will tell you that I have incredible confidence in the police chief and the city of Columbia Police Department. I will tell you that it's staffed with hundreds of men and women who are human beings and who will make mistakes sometimes. But indeed have not only been trained well, but also understand the accountability measures that we have in place that we hold every single one of them too. Some of the issues you raise are historical issues regarding law enforcement and people of color in this country. And some of them are quite true. Some of the factual data regarding diversity at the department and the ways we've been addressing it, we probably need to spend some time talking about it because we've worked closely with the community, with members on our volunteer boards, with the Columbia Urban League, to work to aggressively diversify our staff. I think you'd be impressed with some of the work we've done in terms of transparency and accountability and training. And I'd be happy to share those with you in the interest of transparency. Yes, Senator Scott did help secure some funding from the state of South Carolina to help address some of our comprehensive plans for the Beltline Corridor. And I'd love to help share those with you. I think you'll be favorably impressed with the plans for this entire 18 acre track that borders the colony and formerly the Bethel Bishop neighborhood is now North Point. So, huh? Where should we be up there? Oh, yeah, absolutely. So some fantastic things happening here. So be happy to dialogue with you as much as possible. We can start in the interest of transparency and sharing ideas and maybe common experiences and always have the ability to even agree to disagree. But requiring the very best from the men and women who choose to be peace officers in the city of Columbia is something that we'll never, ever hedge on. We will do that. Trying to create an environment where these young men have the opportunity to live up to the guy giving potential and they have incredible promise. We've been working to address that. There was a presentation earlier today about some of our efforts in our parks and rec program and some of the investments we're making in STEM. Summer jobs for young people. I've walked through the colony myself and the bishop passing out flyers, encouraging people to either participate in our free summer camp programs or also some of the paid summer jobs program. So let's dialogue a little bit more with that. I think we might find we have a whole lot more in common than we have separating us. But I will tell you the issues facing young African-American men in America are real and they're challenging. And we take them very seriously. So let's spend some time talking about it, okay? Yeah, yeah, and I'm taking it real seriously. First of all, most of them should never even stop me anyway. Absolutely, yeah, absolutely. We can talk about that. I have no idea.  But let's talk a little bit more about it, right? God bless you. Thank you. All right, all right. Is there a motion to adjourn? Take care, young men, all right? All right. All right, is there a second? Second. With the previous question, Claude, call her all. Mr. McDowell. Yes. Mr. Duvall. Mr. Vine. Mr. Davis. Mayor Benjamin. Aye. Have a good evening.


I appreciate it as you were both speaking about the deep importance of listening and and and Charles you were saying a moment ago that the call inevitably will happen and inevitably we will attend to it. It does happen. It's inevitable. Anything you'd like to share about no listening skills as these as these murmuring start coming from within our deep spiritual nature. Yeah. What can I say about that. It's sometimes hard for me to answer abstract questions, because the information that you're asking for is unique to the listener. Yes. I appreciate that. I've been getting a little bit fed up with being in the position where people ask me questions. And I offer answers in like this public way. You know, sometimes it works as we've been being an avatar of like an actual being asking a question. And for a lot of people it's actually a matter of tuning into something else, because maybe you get habituated to listen to certain voices that drown out the quieter voice that that you're talking about the call. You know, a lot of times when the call comes, it is so loud that you can only tune it out with great harm to yourself. It's obvious. So again, I would say don't make this hard. The call is it, I can say also that it takes the form of something that you care about. You care so much that it's just a no brainer to put aside whatever else you thought was important, because in this moment it's just obvious what's important. And if you are not in that place you can't force that to happen. It might just be that it is not calling right now. And if that's the case then maybe you're in a preparatory stage. And that preparatory stage could even be the cultivation of skills that are not being yet used for their correct purpose, for their true purpose. Like you might be, I don't know, an artist and your, or a musician and you're writing commercial jingles, or you know, advertising images or you're using your gifts in service to something that actually you don't resonate with. You're not, you don't actually care about that. And maybe you're feeling like you're living somebody else's life you're having a life you're paid to live, but what am I supposed to be doing I don't know. That's because the call hasn't come. And so the preparation then is actually to refine your gifts and to do your best in every circumstance. Then you develop these powers, these capacities that when the call comes, you're ready, you're powerful.


When I came aboard the film one of the biggest things that I wanted to do was make sure that we were able to tell the story authentically. So step one was actually finding as many corsairs and bear cats as we could. So we sort of scoured the the the United States with the help of our aerial team led by Kevin LaRosa to find where these planes were and we brought them all together, got them painted for VF 32 and we knew now that we had a chunk of the squadron that we could actually shoot in camera for real which was very exciting. And then there were a lot of other smaller elements where you know none of these Essex class carriers are obviously still operational. So what we actually did was we one-for-one replicated the tower and built that on an airfield in Statesboro, Georgia. That way we had this real location that was really affected by weather and light. We could park real corsairs in front of it and it really gave you the experience of being on the ship even though we were miles off into the woods. So so much of what we were trying to do in this process was just to make it feel real, make it feel like you were really there with Jesse and Tom in 1950. This film has to be seen in theater because if you look at the canvas that we painted with in this movie it's all on these giant IMAX formats. We have Eric Messerschmitt who's Academy Award winning DP with JD Dillard who have these giant panoramas of things happening in the frame. When you really watch this movie there's so much going on in addition to the emotional story. All the nuance there you have these epic set pieces. We're pulling warbirds from around the world that have never been seen on film. I mean this is really for aviation nuts for any veteran to see what we're putting on the screen. It's never been done before so it's for me it's just a really exciting thing and audiences if you want to experience this movie and experience it correctly mounting IMAX cameras on warbirds and doing everything that we're doing in this film you'd be doing yourself a disservice to not be watching it on the biggest format you possibly can.


Some of this material overlaps a bit with Professor Higgs lecture that you some of you just heard on the FDA and a quality assurance and that kind of thing so I Apologize in advance for any overlap, but I have learned from teaching for some years that Students usually benefit from hearing things twice. So if there is some overlap, I hope you'll excuse me Shocked when I get my senior undergraduate students and I have to Remind them of the concept of opportunity cost and that kind of thing. So It's very distressing and demoralizing to a professor to realize that something you taught three years ago has a half life of about three weeks at most and Anyway, what I'd like to talk with you about today is health economics I had an interest in health economics from pretty much the very beginning of my study of economics as an undergraduate and This is because my father was a physician and he Was active in a group called the American Association of American Physicians Insurgents or AAPS Which is a great free market physicians organization And they've been around for a long time doing some really good work counter to the far more status AMA so If you're interested in some resources by physicians for physicians on issues such as those I'm talking about today the AAPS Website is great, and I've got some material in here in which I quote from them I'd like to do this in two parts. The first is on pharmaceuticals and profits and regulation I Would like to just mention as a kind of a preface here Bob Higgs book that he edited Called hazardous to our health FDA regulation of health care products excellent resource on this material and I'm sure that There's a lot that I would say that I would agree with on on from from that book Drug companies in the United States and elsewhere enjoy government granted privileges They have patent protection. They have the FDA protection against competitors So there are barriers to entry we'll talk about some of those Hundreds and hundreds of millions of dollars that it costs to bring a new drug to market And who does this benefit but those who already have a drug treating the same kind of illness That's already in the market Then there are these ordinary corporate protections. We've unfortunately gotten used to some of these things and That tends to keep competitors out of the market as well and also limit the degree to which Pharmaceutical companies can be Disciplined by the market for failure to do what consumers want so in if you listen to the lecture by Ronald Hamo we earlier this week I think that was on Tuesday The audio of that is already online He did some great work on the Canadian Medicare type system that they have and I'll refer to that again later But Canada and some other countries have a kind of a monopsony system in which the government is the only buyer effectively of Drug, so what are the effects of this? Miller Benjamin in North in a A book called the economics of public issues Neat little book with a number of short treatments of various economic issues They say that a single government agency in each country acts as a monopsony buyer of health care services on behalf of everyone Individuals are even either prevented from buying health care on their own or limited by government rules as to what they may buy Like other monopsony's the national health insurance systems force down the prices of the goods They buy such as drugs medical devices and Physicians and nurses services this in turn Reduces the quantities of those goods and services that suppliers will provide particularly in the long run The bad news at least if you are a consumer of health care services is that less health care is provided Let's talk a little bit about advertising Advertising for an approved Drug for a newly discovered use violates FDA rules I'm not even talking about advertising a new drug which already has its own hurdles to jump over But we're talking about a drug that's already been on the market for some other purpose and The purveyors of this drug think well, maybe there's something else of this drug can do that We hadn't initially gotten FDA approval for well You're violating FDA rules if you take this old drug and you advertise a new use for it without getting the FDA approval and some companies are simply not going to find it economically advantageous to Revisit that approval process for each new use If you don't think that drugs have multiple uses you're mistaken go take a look at aspirin which I will use later as an example of this The new use whatever that is might be relatively unknown if it's not advertised Advertising is a provision of information to consumers About the possibility of possible uses of a product new drugs According to Tom DeLorenzo do consumers no good if they do not know about them Advertising restrictions imposed by the FDA therefore prop up the profits of incumbent drug marketers at the expense of newcomers in the industry and At the expense of consumers so the FDA is Essentially working on behalf of the existing pharmaceutical companies In a way that prevents innovation prevents things that will come along that could come along that would benefit consumers and the United States has a relatively Free situation in this regard other countries are even more restrictive Canada would be a good example of this What about aspirin well I mentioned this earlier, but in 1988 At a meeting in the offices of the FDA commissioner companies making aspirin We're told that they could not advertise the benefits of Aspirin in reducing the risk of a first heart attack if they did they were told explicitly that the FDA would bring legal action So as a consequence There was a long-term ban on advertising aspirin for For prevention of heart attacks which Because of the absence of that information on the on the part of consumers led to Tens of thousands of needless deaths per year. This is from Thomas soul in his book applied economics quoting Paul Rubin and you can take a look at the presentation when it's posted later and and look up some of these references The FDA is well known for testing drugs and testing foods and making sure supposedly that they are safe for Consumers, but they can make two types of errors when they do this testing. They can first Reject the drug that has benefits greater than the cost That's called a type one error Or they can accept a drug that has cost greater than the benefits That's a type two error. What's happened with the FDA is that they have put a an inordinate amount of Attention on trying to reduce those type two errors The matrix here shows Two possibilities the state of the world either the benefits the new drug exceed the cost of the cost to see the benefits The FDA can then accept or reject the drug There's no negative effect if the benefits exceed the cost and the FDA passed the drug I will add a little caveat there that getting the drug accepted by the FDA did probably cost some hundreds of millions of dollars in some cases possibly more and That itself has a detrimental effect as we'll see but if they end up accepting a drug that doesn't have a negative effect then You say well apart from the cost of getting the regulation Jumping the hurdles of the regulation at least we wound up with the drug on the market There's also no negative effect if a drug which had cost greater than benefits is kept off the market now How do we know if the cost exceed the benefits? I would argue that the market is Exceedingly good at trying to sort out which drugs have costs that exceed benefits and which ones have benefits that exceed costs I would not say that just because you discovered that a drug has some negative side effects that this means that the drug should not be on the market Typically people don't like to put things into their bodies that do them some net harm And I'll point out in my talk later today on consumer product safety there's an article in the fall 2010 issue of the independent review on Food safety regulation that that makes a good point about how Good the market is at sorting these kinds of things out But there are two types of errors as I said one where the FDA accepts a drug where the costs exceed the benefits and one where they Reject a drug where the benefits exceed the cost and this is just from the conventional understanding of what the FDA is supposed to be doing according to the the the mainstream view of regulation, but they they cannot even meet the standard of their own of The of the mainstream view of what regulation ought to be doing The consensus in the economics literature, and this is just mainstream economics literature suggests that the FDA has placed too great of an emphasis on type 2 errors so they're trying to avoid the problem of admitting a drug to the market that later Indicates some kind of major side effect the FDA will Toad out their band of Thalidomide as An example of the kind of thing that the FDA is supposed to be doing and look how great we are we ban Thalidomide and Europeans allowed it. We prevented all these birth defects Now most of you are too young to remember what Thalidomide was or to have read about it even and it's a Drug that was given for morning sickness and pregnant women and it turned out to cause Birth defects your birth defects and the FDA says we'll see this is why we're here We're here to keep people from consuming things that are bad for them Well what we that that's what you know to use the term from Bastiat. That's what seen what is unseen are the type 1 errors Where they fail to approve or delay the approval of a beneficial new drug So in the process of trying to do all of this testing and evaluation in clinical trials and so forth to try to keep a drug Off the market that has side effects that are too severe in the judgment of the FDA They aren't they are delaying inevitably drugs that would have a positive effect one political factor According to this Goosey Harrington and Vernon is that the victims of those type 2 errors are more readily identifiable you can say well Here are the pictures of the victims who had the birth defects because of the drug that that that caused them all right, so the people who die or suffer Because of a drug not being admitted to the market are much more difficult to identify now when AIDS came onto the scene and AIDS victims said well We have for all for for what we know about age. We have a death sentence on our heads.  Why not let us at least give it a shot and so this Led to a an improvement at least in the speed with which the FDA would at Approve certain drugs a kind of a fast track, but it by no means permeated the FDA's policy on these things and The FDA still produces enormous delays The FDA is under this kind of inevitable political pressure as a bureaucracy If the FDA approves a drug that's later found to be unsafe in any way then use media the public politicians will all say well The FDA behaved badly they committed an error But if the agency delays when reviewing applications the patients who need these new treatments are worse off and May even die waiting for the FDA to act But the FDA is only criticized for approving a so-called bad medicine rather than Keeping a beneficial one off the market so they have this kind of culture at the FDA of Requiring longer trials stricter monitoring after they market the drug Initially, and then they're more ready to pull a drug off the market at the first sign of any kind of negative side effect which leads to Fewer options on the part of patients Rising drug prices unnecessary suffering and unnecessary death How did it come to be this way? Well the FDA didn't always have the power that it now does in 1906 The FDA's rule was basically that they were not going to approve medicines that had a substance harmful to your health So if you tried to market something that arsenic in it, they would probably say well Don't think that should be on the market 1938 they said well manufacturers are required to demonstrate safety Yeah, if you've had your basic economics courses you understand that Economists will not see safety as an either or Concept it's not either the drug is safe or it's unsafe. It's a sliding scale. Okay, there's no perfectly safe drug You can kill yourself by drinking water if you wanted to I mean drugs All have some kind of side effect consumed in enough quantities So it's a trade-off really how how safe do you want the drug to be? It's not as though the FDA is able to discover that some drug is unsafe or some other drug is safe there There's there's a sliding scale how how much of a what what's the appropriate trade-off? There's no way for the FDA to know that but in 1938 manufacturers were required to demonstrate safety 1962 came the the the change in regulation that that Really added to the length of time that it took for the FDA to approve a drug because the FDA then had to Then began to say we're only going to approve a drug if it's safe and effective Well, how effective is another question kind of like how safe? But now you can't just approve a drug that's harmless and ineffective You have to show that it does the thing for which it is intended To the FDA satisfaction Prior to the 1962 The FDA was required to approve within a hundred and eighty days unless the drug was not proven safe After 1962 no time limit. So as a result of this the drug approval process was lengthened Prior to 1962 the time from filing for a new drug to approval by the FDA averaged about seven months By 1967 five years after the regulatory change. It was 30 months by the late 1970s It was eight to ten years and along with this extension in the approval process Came an increase in the cost The hurdles are increasing in height It's becoming more difficult for the pharmaceutical company to satisfy the FDA and the approval cost jumped into the hundreds of millions of dollars About said hundreds of billions. I guess I'm thinking about national debt or something Sceptra for example, this is an antibiotic. There was a five-year delay in introducing this to the US market one estimate by George Hitchings Indicates that this delay cost 80,000 lives in the United States I my PowerPoint here says he was a Nobel laureate although we understand that the That has lost some of its meaning lately once they gave the Nobel Prize to Paul Krugman I figured it's not exactly a feather in your cap anymore, but Beta blockers lag in the FDA approval there may have cost 250,000 lives in the United States So this is the unseen part of that the scene in the unseen you see the pictures of the thalidomide victims You don't see the victims of the heart attacks Caused or the people who died of infection because the FDA delayed approval of a beneficial new product Rotavirus Almost all children contract rotavirus by the age of five which produces about 55,000 hospitalizations and 20 to 40 deaths a year in 1998 September 1998 the FDA approved rota shield Vaccine for rotavirus CDC then recommended that this be Used for all infants within a year of the FDA's approval All right, so now we're combining two regulatory agencies We've got the FDA saying this is fine and then you've got the CDC putting pressure On the adoption of this new drug Well over a million children were immunized there were two deaths and 99 cases of bowel obstruction that resulted from That were reported to have resulted from this vaccine But we know we think we know that the system for reporting these adverse effects Catches maybe 10% of the actual vaccine caused into injuries. So Multiplying the two deaths by 10 and we get about 20 possibly they were actually caused and that a number of other Injuries or hospitalizations from the vaccine alone. So it it's not real clear on balance whether the vaccine actually helped Now I'm I'm not anti all vaccines But once you combine the FDA saying these things are are safe and effective And then the CDC putting intense pressure on the adoption of these things All right, the whole government school system saying You have to have X number of vaccinations before you your child can enter the school And we're going to require a child to go to school And this this further Encourages the use of these things that the FDA has said are appropriate One member of the CDC committee who recommended that the rotavirus vaccine be added to the vaccines for children program holds a patent on the rotavirus vaccine Was paid by a large pharmaceutical company to develop the vaccine and did not recuse himself from voting on issues surrounding the vaccine Can you say conflict of interest? All right It's always Surprising to me when I'm not surprising anymore, I guess but it's it's Distressing when people say well, you know private industry is There's all these conflicts of interest and principal agent problems and so forth, but the government, you know fix all of that Several members of the FDA and CDC committee's own stock and the drug companies and stood to gain from government immunization requirements Vioxx now the FDA is on the one hand, it's Delaying approval of beneficial drugs and the only other hand it's got drugs that it approved and Then information that may come out later about the risks of the drug It it sits on this information. It doesn't disperse it as we expect the FDA or we would like to expect the FDA to do So there was a Lancet study revealing viox problems. This was delayed and Information was essentially suppressed David Graham who was a 20-year FDA employee Said what I believe they were trying to prevent from reaching the public was our estimates of the number of people who suffered heart attacks or died because of viox use He said I believe there were multiple levels of FDA management who wanted to keep the information of the magnitude of harm caused By viox from the public and wanted to damage my credibility as a scientist The whistleblower gets suppressed As he's trying to say that the FDA has approved a drug that ends up later With indications of being hazardous That information is The FDA sits on this information He said I would assume the reason this happened is because the FDA sees its mission Primarily as one of serving the pharmaceutical industry with viox the FDA looked the other way in America paid the severe price for it You want more on this this? Came largely from an article by Dale Steinrich that's posted on mesas.org Steinrich goes on to say that it turns out the ten members of the FDA panel who voted for both viox and Bextra Not only had ties to their makers, but their votes were crucial for securing the favorable votes on the panel for both drugs Again conflict of interest it appears $800 million for a new drug to be approved by the FDA These are this is sort of the broken window problem again You could have there really an opportunity cost problem. You could have used that eight hundred million dollars somewhere else By increasing the hurdle you're delaying the introduction of a new beneficial possibly beneficial drug you're also Costing lives simply because eight hundred million dollars can do a lot of good things to improve human health and well-being Some studies indicate that for about every 10 to 17 million dollars of the drop in income one life is lost on average We don't know exactly who this is or where this is or how this is but when people's incomes fall We do know that their life expectancies are shortened Well here countries tend to have longer life expectancies So if regulation is imposing these rather significant costs on the economy We know that life expectancies are going to be shortened. We can count Not particular people we can we can say that lives are going to be lost take eight hundred million dollars divide by 17 Million dollars and we get 47 lives lost Approximately just from the financial cost of drug approval This is not counting to the lay would lay as we've seen for that Beta blockers might have been quarter million a quarter million lives lost another problem that the FDA presents is that individual patients have different situations different Physiologies Different conditions that even their family situation makes a powerful difference in the effectiveness of a drug Conco and Arnett in 2008 said that every day thousands of physicians and patients make myriad choices from available drug options They take into account Differences in effectiveness side effects and drug interactions for each individual patient FDA scientists they say may know a lot about the drugs they evaluate and their average effects on thousands of users But they know nothing About the individualized physiology of each patient on the other hand intensively trained I would say experienced counts for a lot not just training but experienced clinical physicians who do have knowledge of individual patients Are best able to advise them if the drug is appropriate one of the problems. We'll talk about a little bit later If I've got some time is That an individual doctor who has a relationship with an individual patient patient sitting there in the office They have a conversation. They talk about some things that doctor may realize this patient is Incapable of managing Too many drugs at one time or the patient may have budget constraints that cause them to limit The drugs that they will the prescriptions. They will actually fill Or the patient may have peculiar side effects that are unusual Or this particular drug There may be a host of individual constraints on this particular patient So an FDA scientist who may say well, this drug is appropriate and safe and effective and so forth It may not be for that particular patient or vice versa. All right, what have we learned so far? Monopsony buyers government buyers of drugs can discourage long-run pharmaceutical innovation and maybe other therapies We know that advertising does produce some useful information about drugs including new uses that were unknown when the drug was first approved AZT, I'm told which is an Age drug was originally an anti-cancer drug The FDA May avoid deaths from less safe new drugs, but at the cost of suppressing or delaying beneficial new ones The FDA we know also by either corruption or incompetence may allow drugs on to the market that have cost and excess of benefits Rotor shield by ox who mentioned those and then the FDA may assume that the research of its investigators supersedes the knowledge of the patient and special circumstances in clinical medicine Let me go back to this one for a second because I want to make sure you understand. I Am not saying that the FDA should ban a drug or prevent a drug from getting on to the market that may have some negative side effects If I could push a button right here and eliminate the FDA permanently, I would push it without hesitation. I See it as a an imposition on human liberty to have a government agency standing in the way of Me and a provider that I believe produces a product that will make me better off Okay, so I'm not saying that the FDA should approve Should not approve a drug that I would like to consume that I think is going to make my me better off Even if I'm in fact wrong about that however When I have conversations with my students and others about this kind of regulation Many people are under the impression that if a drug is approved by the FDA then it's certifiably safe, and I'm happy with it and the FDA is protecting me against the ravages of greedy drug companies and that's that's the that's the thing keeping me safe is that regulation so the impression that the FDA provides of guarding the public against Bad drugs is itself harmful People may not do as much Investigation doctors may not do as much investigation insurance companies may not do as much investigation into the kinds of drugs that they are willing to approve Because they take the FDA's approval as a stamp of safety and effectiveness when it in fact may not be as the BIOX case shows All right, let's look secondly at bureaucracy and medical costs. I Take the the core of this from Mises book bureaucracy, which appeared in 1944 Mises says that in in this in this book, which I would recommend is very accessible. It's Quite good. He says a government by its nature is Formalistic and rigid you know this by your interactions with the government You know this from stories you've read of the abuses of the TSA You fly through an American airport TSA agent does not care if you're 87 years old and Incontinent and Don't have the the mental ability to understand what's going on as we saw a case just like this not too long ago woman was traveling through an airport with her daughter a granddaughter and subjected to all kinds of intrusive safety inspections by the F by the TSA and The TSA agent does not care about the individual circumstances because the the TSA agent knows The TSA agent will never be held Personally liable for following the rules Okay Any deviation from the rules is a liability for that particular bureaucrat? You know this if you've been stopped by a police officer For speeding doesn't matter what your reasons are it doesn't matter if the costs and benefits of your actions are Such that the benefits are ten times greater than the cost you can explain that until you're blue in the face to the police officer Remember conversation. I haven't been Powell He came to visit Wofford College some years ago, and he said well driving in LA and was in the What do you call it the? HOV lane the high the that left-hand lane they reserve for Multiple passenger vehicles and so forth and he said it was pretty much empty and the other lanes were pretty full so he by himself got into that lane speeding along he was pulled over by a police officer and He told me that the police officer came up and he said You realize of course that all these people over here in this other lane these other lanes are are mad at you for what you're doing and Ben says well, they really shouldn't be because You know I'm leaving their lanes and coming over into this lane. I'm allowing them to go a little faster. So and The police officer says well, I don't think it works that way And Ben says well, that's why you're a cop That's not what that's what he told me I'm sure he got a ticket if that's what he said so But the you know cops or bureaucrats basically they don't care what the reasons were if you're speeding generally They it's if you were speeding then you get a ticket Costs and benefit analysis completely completely out of the question as far as you know your costs and your benefits What they're thinking about is my sergeant will be upset with me if I did not give X number of tickets per month or whatever the System is that they have for measuring the performance of police officers So the core problem for bureaucracy according to Mises is a lack of a measure of success and failure bureaucrats are not operating according to profit and loss Unlike an entrepreneurially driven private enterprise So Misa says it's vain to lament over the fact that the Assyduity carefulness and painstaking work of the average bureau clerk are as a rule below those of the average worker in private business There is no as he says there is no unquestionable yardstick of success and failure Hayek in His well-known article from 1945 the use of knowledge in society if you haven't read that I recommend it He said the sort of knowledge with which I've been concerned is knowledge of the kind which by its nature cannot enter into Statistics and therefore cannot be conveyed to any central authority in statistical form I'm not going to get into the kind of de-homogenization Debate between Mises and Hayek over the nature of knowledge and the nature of socialist calculation problem and that kind of thing But and not that is not a worthwhile debate that you shouldn't read it But what Hayek is saying here is that some information Cannot be by its very nature transmitted in a timely manner to Central authorities so for that reason Hayek is saying It is impossible for a central planner to make good decisions now I would ask in connection to it to the the medical care issue Can a doctor patient encounter be evaluated by a central authority who does not have that individual knowledge of the circumstances of time and place? That goes for an insurance company or a government can a government agent a Thousand miles away from that encounter between the patient the doctor in the examining room Can that central authority say well the doctor did the wrong thing? There's too much information there and what the I'm very concerned about this trend in medicine toward Condensing the results of an examination into a Few items on a on a form There are things that are relevant that are not on the form There are things that are on the form that aren't relevant Newt Gingrich has been at the heart some of this to try to promote this digitization of medical exams and We've seen this appearing in regulation So if you try to scale medical care upward with that doctor patient encounter being scrutinized by central planners some Thousands of miles away does carry risks coding medical coding Current procedural terminology or CPT coding care. It misses information. That's important doctors may be forced to choose do I satisfy the regulator or do I meet the patient's needs and Conscientious doctors who care about the patient may end up doing what is good for the patient, but very bad for In terms of what the regulator wants So they end up bending the rules breaking the rules and so the regulatory authority see this and say well, they're not following the rules They broke the law and Because it's difficult to catch this kind of law breaking they end up making the penalties draconian Don't forget what Mises said It's important to remember he says that government interference always means either violent action or the threat of such action Government is in the last resort the employment of armed men of policemen gendarmes soldiers prison guards and hangman The essential feature of government is the enforcement of its decrees by beating killing and imprisoning physicians are getting hammered By governments who are intent on preserving Their set of regulations without regard for the well-being of the patient now I don't doubt that a lot of regulators think what they're doing is for the good of the patient I don't know how you'd live with yourself if you didn't think that But they are wrong you see this kind of thing in the news. This is from 2009 Physicians snared by growing Medicare fraud strike team strike team criminal charges Are being filed So the government is relying on Medicare data analysis to detect not only fraudulent billing But also quality lapses as they see them for example The June 24th. This is 2009 legal actions focused on services that were suspected to be medically unnecessary Or not provided at all pray tell how is that distant? Evaluator of this physician supposed to tell what is medically necessary or unnecessary Eduardo Perez de Leon in Michigan a former office manager for his wife's internal medicine practice was convicted of 12 felony counts of Medicaid false claims and health care false claims offenses because he coded Patient visits that did not involve a physical examination as office visits The coding was the closest match available consistent with the recommended manuals Physical examination is not necessarily required on every occasion So he spent a year in jail while his family house was threatened with foreclosure and their children were sent back to Puerto Rico To live with family because they couldn't afford to support them He was never able to get a clarification of what the government meant by an office visit a 2000 a 8 I mentioned the AAPS earlier 2000 survey of doctors regarding Medicare fraud found that the system's structure made fraud easy and unintentional errors Virtually unavoidable the system and now is that if that you're a doctor and you make an error It's regarded as fraud 82% of doctors in the survey increased reported increased fear of prosecution or investigation in the last three years 71% said that they were making changes in their practice to avoid the threat of prosecution More than a third were restricting services to Medicare patients 20% reported that they do not want to accept new Medicare patients because of hassles or threats from Medicare Only 16% said it was because Medicare fees were too low Although that may increase with what's going on now Almost a fourth do not accept new Medicare Medicare patients at all 9% only do so under special circumstances More than a third have difficulty finding of Medicare Patients find have difficulty finding physicians willing to accept referrals of their Medicare. I'm sorry More than a third of physicians are having difficulty finding Physicians willing to accept their referrals of their Medicare patients Again hassles and threats of Medicare a 2000 and this is interesting a 2002 GAO study found that 85% of the time Medicare customer service representatives were giving the wrong answer To questions posed by physicians regarding the proper way to build Medicare But if you don't build it properly you could be accused of fraud dragged off to jail The Centers for Medicare and Medicaid Services said well, we're going to do better So 2004 96% of the time Medicare customer service representatives gave the wrong answer Medicare policies and regulations were so complex that their own consume a customer Service representatives.  Sometimes it's giving hospitals the incentives To churn patients through the hospital as fast as they can you get in you get out because the hospital is Reimbursed according to the diagnosis and not for any treatments to follow Once you get the diagnosis you're in and they want to get you out as soon as they can the physicians have the opposite Incentive because the more tests the more therapy the more they get reimbursed now You might think well, this will cancel each other out nicely. We'll know it doesn't for some patients They'll be in the hospital too long and for other patients. They won't be there long enough Depending on whether the hospital or the physician incentives are dominant All right, I'm running short of time so I'm gonna move forward here One of the key problems that has emerged in medical care since or as I should say as governments have Intervened between the patient and the doctor is That you have a distance in Really a principal agent problem the patient and the doctor are separated by another tier of institutions these intermediaries so care providers Begin to work for the satisfaction of the regulators and the third-party payers either the government or an insurance company Rather than working for the patient You get all these competing standards You get the patients own standards which ought to be dominant You get competition between the employer and the insurance company The insurance companies are bidding They're not they're not so much trying to get the contracts with the patients as they are trying to get contracts with the employers The patients trying to to persuade the government to do something with medical care You get the regulation from the government to the care provider You get the lobbying from the insurance company to the government you get the regulation from the government to the insurance company you get the efficiency standards from the insurance company to the care provider What's being left out here is the connection between the patient and the care provider all these other institutions That are intervening between that critical connection between the patient the care provider 40 to 45 percent. I think actually is more like 50 percent now 50 to slightly maybe slightly over 50 percent 51 percent of money comes from the government to the care providers This is somewhat dated In the last few years, of course, we've seen some big changes in this about 40 percent comes from insurance And this is I was giving this presentation a while back and I should have changed this on the slide It's not 15 to 20 percent coming from the patient to the care providers less than that So who is the care provider going to pay attention to? Patient or the government regulator or the insurance company evaluator less and less often is it the patient? moral hazard those of you that have had economics courses at Principles level understand moral hazard. It's the risk that the an insured person He's going to engage in activities that are undesirable Because they make it more likely Claims will be larger now if you think about how Government provided medical care is Performing compared to the private sector one of the accusations against Private insurance is that they're denying claims. They're not and you know, I get papers students submit to me arguing that Private sector needs regulation because private sector insurance companies didn't pay for my surgery that I needed and so forth Well, Medicare according to a 2008 AMA survey Denies six point eight five percent of its claims, which is higher than any private insurer We can also look as as professor Hammond. We did on Tuesday at Medical systems in other countries and we can see well, how do they perform compared to the relatively Mark and I say that that's an important word relatively market oriented system in the United States By no means is what we have today medical care a market oriented system But it is closer to that than you would see in some neighboring countries comparable countries in 2006 there were two point one practicing physicians per thousand people in Canada two point four per thousand in the United States Canada has eight point eight practicing nurses per thousand ten point five in the unit in the US and I Put professor Hammond's link up here So that if you refer back to this you can the audio as I said is already there on Mises org And you can listen to that talk if you want to refresh your memory on this. This was just about three days ago Medicaid's costs have risen far more than the cost of private health care Even though the health care costs for the young which Medicare does not cover have risen faster than for the old over time Medicaid covers all age groups, but Medicaid costs are rising at similar speeds so The black line on this graph here. This is the cost containment record for these two flagship programs in the United States Medicare Medicaid The black line there is the combined annual per patient cost of Medicare and Medicaid in current dollars from about 2008 The red line there is the combined annual per patient cost of all other health care in the United States current dollars If you want to contain medical care costs Government's not the answer to that it's been driving costs upward Again, we can compare to other countries in 2006 the United States had far more MRI machines per million people Than the UK or Canada and Professor hammer. We mentioned another kind of medical imaging technology that was virtually unavailable in Canada PET. I think Scanners were Essentially not available CT scanners now, I I'm not arguing that technology is equivalent to better medical care, but it's an indicator and In the United States, we've got far more CT scanners than the UK or Canada UK has higher rates of death from heart attack stroke and cancer than the United States These are areas where medical intervention might play some role Helping people be healthier and live longer Canada has higher rates for heart attack and cancer Cancer survival rates are better in the United States and as professor hammer We mentioned so eloquently on Tuesday the wait times to see doctors are far shorter In the United States than they are in countries like Canada and here you see on this chart On the left hand side you have the percentage of patients who have short waits and on the right side Of the graph you have the percentage of patients who have long waits In the United States, which is the red bar 74% of patients have short waits Compared to say Canada where it's 40% have short waits Long waits, it's 10% in the United States and Canada's 42% Do not go to Canada if you want quick medical care Unless I guess you're a dog or a horse in which case you I had to put this in here because You know, of course you think Austin powers and all the bad teeth and everything, but of course There's a reason for this, right Why are the British pulling out their own teeth with pliers in the garage? real story this is this is 2007 It says some English people have resorted to pulling out their own teeth because they cannot find or cannot afford a dentist 6% of those 6% may not sound like a lot, but how many people in the United States? Do you know that do this? 6% of those questions in a survey of 5,000 patients admitted they had resort resorted to self-treatment using pliers and glue Well, they have a two-tier dental system They have either the publicly subsidized treatment through the National Health Service and other people who perform private work, which is more expensive now It it may be publicly subsidized But if you can't get the care because you can't find a dentist willing to accept you because of the shortages and the lines and the waits Then it's effectively not available Three-quarters of those polled said they had been forced to pay for private treatment because they had been unable to find a National Health Services dentist Almost a fifth said they had refused dental treatment because of the cost One respondent in Lancashire, Northern England claimed to have extracted 14 of her own teeth with a pair of pliers I Think you only have 32 right I Took most of my teeth out in the shed with pliers. I have one to go another I don't know if that means one more that needs to be extracted or one more that's left in the mouth I don't know but Other people said they had fixed broken crowns using glue to avoid costly dental work Valerie Hallsworth says She told British televisions TV She had removed seven of her own teeth using her husband's pliers when her tooth toothache became unbearable and she was unable to find a Government dentist willing to treat her Either even the National Health Services is admitting this this system is failing All right to sum up now because I'm out of time Pharmaceutical regulation kills people that's about as quick as I can say that in a nutshell Bureaucracy produces rule-based behavior instead of entrepreneur directed discretionary behavior, so we get to have more death more suffering we We have bureaucrats operating according to their rules, which are not necessarily conducive to the patient's well-being and individual cases and We know also the principal agent problems emerge as third-party payers like the government separate the patient from the doctor Finally, we've seen that moral hazard problems created by third-party payers increase medical costs Leading governments to ration care as they do in countries that have more status medical systems than our own here in the United States I'm sorry that I don't have time to take questions, but I'll be happy to talk to you afterwards If you like I'll stick around for a few minutes until the next speaker comes in and be happy to talk with you as much as I can Thank you