Blair Songster Needs to Offer

Blair Songster needs to offer information to her boss, Haney Brill, regarding a proposal to install a new stationery plant at a medium-security federal prison in Minnesota. The issue is complicated, and there are many competing interests. Along with the funding for the prison plant, federal government agencies would be mandated to buy paper from the plant at over-the-market prices. While the plant would use 100% recycled paper, aligning with a presidential statement that the government would attempt to use such paper for its agencies, it would also contradict a mandate to only use prison products if they are competitively priced. For their part the paper company, Polaris, is planning to close their plant but could go ahead with the retrofit should it be economically viable. The CEO and congresswoman Ellen Moe are friends, and he may be hesitant to close the plant as long as she is up for re-election.

The plan would allow the local paper mill, an antiquated facility, to stay open. The various retrofits that would be required to do this will help a number of groups. They include Karelia, a company that wants to develop a resort; AWA, a waste company that would contribute raw material to the mill in exchange for use of the expanded landfill; and the local EMS, who propose to siphon resort revenues to upgrade its services. There are other competing priorities for local funding for the project. Also, many locals are opposed, from environmentalists to a group opposed to the resort development. In terms of goal diversity, most parties are in favor of the proposal, but for their own specific purposes.

2) the problem is to determine if this prison-paper-resort-dump scheme is workable. The objective is to spur the economy in the depressed four country area. This objective has run into a group of individuals, each looking for government help for their plans, and it now needs to be determined if this plan is in any way viable. The main obstacles are cost control - the plan will ultimately rely on subsidies to both the prison and the resort - and resistance to change on the part of the locals

3) There are a couple of different causes to the problem. One is that amongst locals there is significant resistance to change. They currently have use of the area and do not wish to share that use with an outside real estate developer and outside customers. This resistance is compounded by the fact that they as taxpayers would subsidize this development. Other resistance comes from the environmentalists. Though they are discounted by many of the principals in this case, that does not mean they are unorganized or a non-factor.

More resistance may come from local governments, in particular those in Wisconsin who would finance some of the project. While the development has increased the level of excitement among some, who see it as a potential boost to the economy, there are competing interests for those taxpayer dollars. Those interests would need to be overcome to make the project viable.

There are other significant causes of the problem as well. Much of the information is defective. Each party has their own goals, and while there is some common ground, the actual implementation of the project has significant goal diversity. Each has their own set of information, much of it spurious, highly speculative in nature. It often takes the most optimistic scenarios to result in a positive net present value, and even then the resort and prison paper factory do not have positive NPVs.

Communication is another key issue. The communication between the various involved parties is extremely patchwork, to the point where nobody can be counted upon to know what everybody else is doing.

4) Songster is faced with the following alternatives. The first is to approve the prison factory plan. This will essentially force Polaris' hand, which could backfire should Doherty decide he would prefer to close the plant anyway - he has a friend in Congress who could stand up for his interest. Moreover, it would lead to protest from different agencies forced to purchase expensive paper. The argument that Smarck's paper would be sufficiently different as to warrant an exemption from federal purchasing mandates is tenuous at best. However, it would benefit the factory, possibly Polaris, and definitely all the parties who are counting on a Polaris plant retrofit to aid their schemes.

Another alternative would be to decline the prison factory plan. This would essentially shut down all of the schemes, but would curry favor with the electorate in the area, many of whom are opposed to the project. It would not address the greater issue of economic stagnation in the area. However, there is nothing to say that this particular scheme is the only option for the area, let alone the best one.

A third alternative would be to seek better options. The biggest issue for government to address is the regional economy. At present, there are no other proposals on the table, but given time one might emerge. Holding off would please opponents of the various schemes, and allow for more thorough research regarding the current option. A fourth option would be to fund the upgrades for the EMS, since that option would help bring the four county EMS up to the desired national standard, and it is more politically acceptable to finance EMS than an unprofitable prison factory and a half-baked resort development scheme. Options three and four can be combined.

5) the cost estimates for the prison option are vague. There appears to be some benefit to homeowners in the area in terms of reduced flood insurance requirements, and potentially some benefit can be attached to the lives the EMS team expects to save, but on the whole the numbers are very fuzzy. The costs of declining the prison proposal would be the lives not saved - a concern mainly to Palchaterian and only if the EMS is going to get any money anyway, which is a questionable assumption; and the economic fallout of the Polaris plant closing.

The third alternative provides an opportunity to counteract the loss of Polaris without the costs associated with this current proposal. It may take time, but this slow-moving rural area does not appear to be in a rush, with as many people opposed to development as for it. Moreover, the prison has funds set aside for it and therefore can still be used as a lynchpin for development, just on a different project. The fourth alternative saves lives, at a cost of $100,000 per year. The worst case scenario means a life costs $200,000, which is acceptable. The economy loses the Polaris jobs, but saves by avoiding the potential debacles with the resort and the prison factory.