Thursday, October 03, 2002

Alphabet Soup: The city council takes aim at CVB, CCC, RDC, and "quasi-governmental" agencies.

Memphis Flyer (link to original)
By John Branston

The alphabet agencies are about to catch a little flak from the Memphis City Council.

The spark that set off the council's fire was the Memphis Convention and Visitors Bureau's (CVB) hiring of former Shelby County mayoral aide Tom Jones less than a month after Jones was suspended for using a county credit card for personal items. When Jones was not reappointed by new county mayor A C Wharton, the CVB and its president, Kevin Kane, snapped him up.

Jones will be doing a job in community development that did not previously exist at the CVB. The Commercial Appeal reported that his salary will be approximately $100,000, but Kane said last week it is not that much.

Kane attended Tuesday's council committee meeting where the issue of "quasi-governmental agencies" was pressed most forcibly by council members TaJuan Stout Mitchell and John Vergos. Kane noted that the CVB wasn't created by the city or county and has gotten "not one penny from the general tax fund in 20 years." It does, however, get a dedicated revenue stream from the so-called bed tax on hotel rooms.

The council committee unanimously approved a resolution requiring the "quasis" to regularly provide information about budgets and expenses. The list of agencies is yet to be compiled, but members indicated it will include the CVB, Center City Commission (CCC), Riverfront Development Corporation (RDC), Memphis in May, the Memphis Regional Chamber of Commerce, and The Orpheum.

Mitchell said she wasn't singling out the CVB or Jones but felt the job should have been posted because "there are a lot of folks looking for jobs and people need to know where the opportunities are." She said she didn't care if "Donald Trump or Donald Duck" gets the job.

"This is just a request for information," she said. "It does not imply that someone will lose funds."

Vergos said some of the agencies are "creating kingdoms" run by a handful of well-connected board members who are hostile to requests for sensitive information but quick to run to the council in time of need.

"They want to all act as if they are independent private corporations," he said, noting that his father, Rendezvous founder Charlie Vergos, was instrumental in setting up both the CVB and the Memphis Development Foundation, which runs The Orpheum.

Turf and jealousy may be factors with the council as well. The alphabet agencies have been grabbing a lot of headlines, and the pay and perks are usually better than they are in government. The city council gets the heat, a modest salary, some of the bills, and a supporting role. Top executives at the quasis tend to be consummate government insiders or, like Jones, former top-level government employees. In recent years, three city and county division directors have moved over to alphabet agencies -- Benny Lendermon and John Conroy at the RDC and Dexter Muller at the chamber of commerce.

Neither Kane nor council members were particularly happy with the term "quasi-governmental agencies." In addition to being a mouthful, it lumps together agencies like the RDC and CCC that were created by elected public officials and organizations like the CVB and chamber of commerce that get most of their operating support from their members.

The resolution adds to the confusion by making it seem that divisions of city government are the target. It says "each division of the City of Memphis that is either dependent on city funds or the approval of same shall provide the Memphis City Council and the chief administrative officer of the city of Memphis copies of their enabling legislation, annual report, 10K form, and personnel policies and procedures" each year.

A handier and more accurate catch-all is "nonprofits," although that has an outdated "food baskets to the needy" connotation. All of the groups the council is interested in are nonprofits, and they are already required by the IRS to file and make readily available to the public an annual Form 990 listing their public purpose, top salaries and benefits, budget, and income and expenses.

Nonprofit organizations, specially created authorities, and quasi-governmental agencies have virtually taken over much of downtown, including the public parks on the riverfront, AutoZone Park, the new NBA arena, The Orpheum, Memphis in May, and dozens of office buildings and apartments to which the CCC's Revenue Finance Corporation holds title, so they can get tax freezes.

Councilman Jack Sammons pointed out that many nonprofit board members serve for altruistic reasons, bring special skills and fresh ideas to the table, and "would be glad to provide us this information."

This is not the first time the accountability issue has surfaced. During the NBA arena debate, state Senator John Ford, a member of the Public Building Authority, argued that the authority and, by extension, the arena could not exist without the enabling legislation and support of the state legislature. Elected officials have made similar comments about the CCC, with the result that several of them now serve on the board.

Vergos said having a city council representative or other elected official on the board of the quasi-governmental agencies doesn't solve the accountability problem if the board is "stagnant" and run by a handful of insiders.

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