Springfield City Council: All the Blame, Little Credit, and Tacos for Lunch

The buck stops at the City Council but the City Council gets no bucks

I had to miss last Tuesday's City Council luncheon so, after today's luncheon, I went to the Clerk's office and picked up the materials Internal Auditor April Lathrom passed out at last week's meeting.

Lathrom had reported, of the 53 recommendations made by the State Auditor, all but two have been addressed.

In her letter to the "Honorable Mayor and Members of the City Council," Lathrom wrote:

"The only two items that require further follow-up action are the recommendations related to the economic development policy on incentives offered to developers and improving the funding status of the Police and Fire Pension Fund. The City is in the process of developing a comprehensive economic development policy, and as you all know, the City continues to explore ways to improve the funding status of the Police and Fire Pension Fund."

The State's Audit Report of the City of Springfield had recommended:

"City Council should refrain from pledging taxpayer funds to assist developers in obtaining financing for projects. In addition, proposals should be solicited for services provided by developers, and agreements should be clear with regard to the use of restricted city funds. Further, City Council should review future development projects to limit the city's financial exposure."

The response from the Director of Economic Development Mary Lily Smith came last Tuesday (March 24, 2008). Smith said an economic development policy was being developed that would address the circumstances under which certain incentives should be used. The report issued by Lathrom also said the policy would be used to evaluate private developer's requests for public assistance.

In addition, The Chamber of Commerce and the Springfield Business and Development Corporation are working with the City to provide a "SWOT" (strengths, weaknesses, opportunities, and threats) analysis of the Springfield market from a "site locator perspective." The SWOT analysis is planned to assist the finalized policy currently being developed by the City.

Several issues were noted under the "Downtown Development" section of the State Audit Report, dated December 2007. Among them were some interesting facts about historical and current events on the Heer's deal.

> "The city pledged $1.5 million in public funds to assist a developer (Vaughn Prost) in obtaining private financing to purchase the Heer's Tower and subsequently paid approximately $3.3 million to purchase the developer's loan and foreclose on the property."

> "In the agreement with the second developer (Kevin McGowan)...if requested by the developer and approved by the Convention and Visitors Bureau (CVB), the city agreed to consider pledging a portion of the city's hotel/motel tax. Since city code requires the hotel/motel tax monies to be spent solely to promote tourism, it is unclear how the city intends to ensure compliance with city code if these funds are pledged to one developer."

The auditee's (City's) response to the 2007 State Auditor's recommendation included the following statements:

"The Heer's Tower was a glaring blight on downtown and its continued presence in that condition was an impediment to additional private reinvestment.

The pledge of City collateral accelerated millions of dollars of work being completed on the building and was made only after a third-party legal opinion stated unequivocally that the City had full legal authority. The City also ensured it had adequate security against the loss of the pledged collateral, including the right to ownership of the building....

...The City...made the decision after multiple opportunities for public comment and approval in open session...."

As noted in the September 12, 2007, issue of the "Community Free Press," the night the City Council approved the City's purchase of the bank loan and foreclosure on the Heer's building, there were 5 speakers. All of the speakers were opposed to the City Council's approval of the purchase of the bank loan and foreclosure.

On another note, the millions of dollars of work, done on the building due to City assistance in obtaining financing for Vaughn Prost for the project, may all be lost today. The Heer's building is not currently being renovated and has lost much of the window covering (mostly plywood and plastic) which once kept the rain and the wind out of the building, allowing the elements to erode any improvements Prost may have made to the building years ago.

In short, just as it was in 2006, 2007, and 2008, the Heer's Tower continues to be "a glaring blight on downtown." Does its continued presence in that condition continue to be an impediment to additional private reinvestment? Who knows? Currently, "the City" isn't talking out of that side of its economically developing mouth.

A recent "Springfield News-Leader" article made clear the sentiments of Director of Economic Development Mary Lily Smith today, and they have not changed much since the response included in the audit report. From the News-Leader article:

"If Springfield wants to compete with other cities for jobs, it must be able to offer some incentives, she said.

"Cities small to large offer basic incentives, like tax incentives and enterprise zones," Smith said.

She said the new economic development policy makes clear that the City Council has discretion in offering incentives.

"It's up to the council to say 'yes' if the project is of great benefit to the city or if the project wouldn't happen without the city's participation."

Smith is right. It is up to the City Council to say yes or no to "incentivizing" economic development.

Such incentives seem to have worked well for Heer's building redevelopment, after all.

But, let's examine our City Council's responsibility.

To use a Manleyism, "the experts," such as the Director of Economic Development, and other City staff, recommend for approval the projects they feel are "of great benefit." How convenient is it for the "expert" to then lay total responsibility for failure (or success?) at the feet of the City Council to whom the "experts" sold the project?

Clearly, if the buck stops at the desk of our all volunteer City Council, because they approve or deny the "expert" recommendations of City staff, with all their "expert" resources and prepared presentations, they are long overdue for a raise or, at the very least, prime rib rather than tacos.

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Employee theft usually IS a "complete surprise"

My Dad, the hillbilly philosopher, told me something when I was probably about 11 or 12 years old that always stuck with me, paraphrased, he said:

"Jackie, there are a lot of people in the world that aren't very good people but they are very likable. Some of the most likable people you'll ever meet may have little morals and little integrity."

I thought about that this morning when reading in the News-Leader about the "Aunt Bee of Niangua," Joyce Thornhill, who has been accused (but not convicted) of stealing money from the city of Niangua coffers.

"...it was a "complete surprise" when city leaders learned 58-year-old Thornhill might have bilked the town for more than $8,000, Niangua Mayor Roger Mepham said Monday.

"She was the nicest lady you'd ever meet.""

Similarly, when I talked to a family member who formerly worked at the Municipal Court with Rhonda Bateman, the relative grappled with a broad spectrum of emotional reactions along with several of his/her past co-workers with whom the relative stays in touch. Being family I assume it was off the record. They were personal conversations during a time when my family was spending a lot of time together due to my Mother's health issues and so, carefully, I'll mostly just mention the flavor of the discussion.

There was a similar reaction on the part of those who worked with Bateman as there was on the part of Niangua city leaders discovering "Aunt Bee" was a thief. That "complete surprise" was coupled with indignation over the feared public assumption that all the employees of the Municipal court would be suspect, a sort of "how dare she impugn our collective integrity" attitude. Then there were the remembrances of the sweet birthday cards and small gifts that co-workers were given over the years by Bateman, the nagging fear that even the Bible that one co-worker received as a gift from Bateman could have been afforded by the bilked and misappropriated funds that Bateman plundered. I wondered, how does one hold in hand the very Word of God, read and study it's righteous instruction while wondering if it was, in essence, stolen from the public trust!? My relative told me the receiver was considering returning it to it's source...even that might be questionable, who was the source of the gift? Rhonda Bateman or the taxpayer?

After the audit of the Municipal Court I looked at employee theft as an angle for the second article I wrote about it for Community Free Press - Midweek. In "Are Springfield Funds Now Protected?" (August 29-September 11, 2007 issue) I noted:

"According to the FBI, employee theft is the fastest growing crime in the U.S....

"We don't anticipate that any of the government employees, are going to be stealing, and so, you're not prepared for that," said State Auditor Susan Montee when she discussed the Municipal Court audit report."

That is one of the reasons I wrote State Auditor wrong or lying, City of Springfield's Finance Director says, "checks not a problem." This was the second time I had either heard with my own ears or read another reporter relay that Springfield's Finance Director didn't really believe that a recommendation made by the State Auditor was a problem.

Regarding the State audit's discovery that city employees were not turning in detailed receipts to document employee purchasing card spending, Decker said she did not feel there was a problem with the issue:

"For the amount of transactions we process, we don't have a problem with receipts not being turned in, Decker said. "We do understand when people are traveling or doing a lot of business, occasionally a receipt will get lost and we try to accommodate that. It's just that we don't want that to become a habit."

According to Decker, in such cases employees are allowed to turn in a memo describing what was purchased with their card." - Community Free Press - Midweek, City Officials Grapple With Audit, January 2-15, 2008 issue.

Back to the article, "Are Springfield Funds Now Protected," I listed employee theft Statistics:

> $50 billion dollars are lost annually due to employee theft and fraud.

> 20 percent of all businesses fail due to internal theft and fraud.
> A company loses 1 percent to 2 percent of its sales to crime -- most committed by or in collusion with employees.
> One in three employees steal and it's rising 5 percent a year.
> 20 - 25 percent of the work force will cheat when the stakes are high and supervision is low.
> 10 percent of the work force will cheat no matter what.
> 75 percent of all employees steal at least once -- half of these, at least twice.
> 43 pecent of workers admitted stealing from their employers.
> Employee theft is the fastest growing crime in the U.S.

Naturally, all of us want to trust and give the benefit of the doubt to everyone, whether they are an employee of McDonalds, WalMart or our local city government and I don't mean to suggest that people who work for the city are more inclined to steal than other employees but neither would I suggest they are less inclined to steal than other employees. I just want to see employee theft taken seriously and I think a little less "benefit of the doubt," in light of those statistics might be called for, especially when discussing the public trust. Susan Montee said because we don't expect government employees to be stealing, "you're not prepared for that." We need to be prepared for that, we need to be preventing that.

Remember:

"Some of the most likable people you'll ever meet may have little morals and little integrity."