watchdog

Tuesday, January 27, 2009

The Commercial Appeal Article on Beale Street but not the 17 boxes of hidden Beale Street documents

January 28, 2009

There was an article yesterday morning in the Commercial Appeal concerning how the City of Memphis is getting tough on John Elkington and Performa Entertainment. However I reported on this in 2005 in two website article. In those article I reported that I received a tip that there was boxes of Beale Street documents and reports hidden in a locked storage room at 701 N. Main, the Offices of Housing and Community Development run by Robert Lipscomb. I called the then City Attorney, Sara Hall, and asked her to check and she stated that she could not go down there but sent Elbert Jefferson, the current City Attorney, to check. He did if fact find 17 boxes of Beale Street documents and Wil Gotten, a retired lawyer, and I did eventually get to see them but only after they were sent to Ricky Wilkins for his review.


The City of Memphis has done nothing to enforce their rights since 1992 even though they had all these documents and reports. There was an audit done in 1992 but the results were never allowed to be published. The City of Memphis cannot now claim that they have been in the dark all these years. They have simply failed in their fiscal responsibility and oversight to the taxpayers of the City of Memphis. This failure needs an independent audit and investigation by the City Council. Following are the two website article published in 2005.


MORE INFORMATION ON BEALE STREET SCAM

November 30, 2005

Will Gotten and Joe Saino have been involved in trying to find out why Beale Street Development/Performa Entertainment have not paid one cent to the City of Memphis since 1982. Previously we have published the leases to Beale Street Development Corporation and to Performa Entertainment in this website section in an article dated September 19, 2005. We asked the City of Memphis and Performa to furnish the quarterly and annual financial reports required under the lease agreements. The City of Memphis initially said that they did not have the reports that showed how much the City had been paid but then they revised that answer to say that they in fact had some reports but that there were no reports showing money that had been paid since they have not received any money from Beale Street since 1982.


The story gets more interesting because Joe Saino received information from a source that there were a number of boxes of reports and files that were in a locked closet at the Offices of Housing and Community Development at 701 N. Main. This information was given to the City Attorney and she said that she never knew that the reports were sent to HCD. She sent someone from her office down to HCD and in fact there were seven boxes of documents about Beale Street there in a locked closet.


She sent the boxes to Ricky Wilkins (the attorney representing the City in the Beale Street case) for his review and then she contacted Will Gotten and Joe Saino to allow a review and inspection of the contents of the boxes. She also provided copies of some of the quarterly and annual reports from John Elkington and upon inspection of these reports she admitted that she did not understand the reports and could not determine what monies, if any, were owed by Elkington to the City of Memphis.


The conclusion of all this effort and investigation is the following.


• No one from the City Administration has been doing any oversight on Beale Street and no one knows or seems to care if the reports are accurate.
• The City Administration has abdicated its fiscal responsibility in this matter and has allowed John Elkington to do as he wants.
• The City of Memphis, the State of Tennessee and the Federal Government have spent millions of dollars on Beale Street and no one can show whether the money has been spent wisely or whether it was worth the cost.
• There have been no independent audits or verification of the Beale Street reports.
• Hundreds of thousands of dollars have been spent in useless litigation by the City of Memphis concerning Beale Street Development Corporation and Performa Entertainment.


This is yet another example of the incompetence of the Herenton Administration.


Check below some of the missing annual reports from John Elkington to the City of Memphis.

Click here to see some of the Beale Street Reports sent to the City of Memphis about which they are doing nothing.

Click here to see the Beale Street Budget for 2005 sent to the City of Memphis.
MR. MAYOR AND MR. ELKINGTON, WHERE ARE THOSE REPORTS?

September 19, 2005

Recently an outstanding Memphis citizen sent an open records request to Ms. Sara Hall, the City Attorney, asking for information about Beale Street Development Corporation. His name is Will Gotten and he is a retired lawyer. Here is his request.

From: William Gotten
>To:
>Subject: Beale Street Development Corp.
>Date: Wed, 22 Jun 2005 10:52:28 -0500
>
>Dear Mr. Jefferson: In November, 1982, the City of Memphis entered into a
>lease of Beale Street property to Beale Street Development Corp. (BSDC), a
>non-profit corporation, which then, with the approval and knowledge of the
>City, subleased to Elkington & Keltner and its successor in interest,
>Performa, Inc. The lease and sublease provide that rental payments are to
>be made to the city based on rental income received from the demised
>property during its term.
>
>As a taxpayer and citizen of Memphis, I would like to inspect the municipal
>documents, records, letters and communications, both written and in
>electronic form, that contain information relevant to the following
>subjects:
>
>
>1. The amount of money that the City of Memphis has received each year as
>rent of the demised property directly from BSDC since 1982 to the present
>date.
>
>2. Any written agreements that provide for payment of rent for the demised
>premises to be made directly to the City of Memphis by an entity or person
>other than BSDC.
>
>3. The amount of money that the City of Memphis has received or is receiving
>currently by an entity or person other than BSDC, since the inception of
>such payments to the present date.
>
>4. All annual, semi-annual or quarterly accountings of gross funds received
>and/or expenses deducted, which is determinative of the rent the city has
>received or is currently receiving for the rental of the demised property.
>
>
>Please provide promptly a date, time and place for the inspection of
>documents and personnel for making copies if desired. The reasonable cost
>of such copies will be paid at that time in accordance with City of Memphis
>policy concerning furnishing copies of city documents.
>
>Thanking you for your cooperation, I remain
>
>Sincerely yours,
>
>
>
>William M. Gotten

After almost three months and repeated requests for an answer he finally sent a communication saying that he was filing suit to obtain the information. The next day he got a call and an answer. Here is the answer from Ms. Hall.

VIA E-MAIL AND
U.S. MAIL

September 14, 2005

Mr. William Gotten
6426 Kirby Oaks Drive
Memphis, TN 38119

Re: Open Records Request

Dear Mr. Gotten:

I am writing in response to your August 31, 2005 letter to me and as a follow-up to our telephone conversation this morning. As I stated at the outset of my call, I called you this morning to personally apologize for the amount of time it has taken to answer your open records request. Also, during that telephone conversation, I gave you the answers to the questions you asked in your open records request and stated that I would follow-up with a letter to you, which I am doing now. Your inquiries and the City's preliminary responses are as follows:

1. The amount of money that the City of Memphis has received each year as rent of the demised property directly from BSDC since 1982 to the present date.
Answer: I have checked with the General Services and Finance Divisions and have been advised that the City has not received rent from BSDC since 1982 to the present date.

2. Any written agreements that provide for payment of rent for the demised premises to be made directly to the City of Memphis by an entity or person other than BSDC.
Answer: I have checked with the General Services and Finance Divisions and have been advised that there are no written agreements that provide for the payment of rent to be made directly to the City of Memphis by an entity or person other than BSDC -- that is, other than the documents that we have already produced to you which include the lease between the City and BSDC and the sublease between BSDC and Elkington and Keltner Properties. In as much as you indicated that you already had these documents in your possession, I have requested a check in the amount of $8.25 be made payable to you as reimbursement for those copy costs.

3. The amount of money that the City of Memphis has received or is receiving currently by an entity or person other than BSDC, since the inception of such payments to the present date.
Answer: I have checked with the General Services and Finance Divisions and have been advised that the City has not received rent or other money related to these agreements or premises from any entity or person other than BSDC.

4. All annual, semi-annual or quarterly accountings of gross funds received and/or expenses deducted, which is determinative of the rent the city has received or is currently receiving for the rental of the demised property.
Answer: Since the City has not received any funds, there are no accountings of funds received.


Mr. William Gotten
September 14, 2005
Page 2



Again, I apologize for the delay in responding to your request. As you are probably aware, the City has been involved in lengthy litigation with a number of parties over the operation of Beale Street for a number of years. Also, there have been various City officials assigned the responsibility of overseeing activities on Beale Street over the years, many of whom are no longer employed by the City. I appreciate your understanding.

Sincerely,



Sara L. Hall
City Attorney

xc: Keith McGee, Chief Administrative Officer

A little history is necessary here. We have attached below the two leases in question, the lease between the City of Memphis and Beale Street Development Corporation (BSDC) and the lease between Beale Street Development Corporation and Elkington and Keltner Properties, Inc. (lessee) and its successor in interest, Performa, Inc. Both leases are dated November 29th, 1982.

The lease between the City and BSDC is signed by interim Mayor Wallace Madewell who succeeded Mayor Wyatt Chandler when he resigned. In that year the FBI and the IRS investigated BSDC records and BSDC signed a 32 year lease with the City and contracted with Elkington and Keltner Properties to co-develop and manage the properties. (Later Elkington and Keltner renamed Beale Street Management as Performa Entertainment Real Estate Inc.) In 1994 an option was signed to extend the contract to 2034. In March of 1992 Mayor Herenton ordered an investigation of BSDC and Elkington’s Company. In October of 1994 Herenton said that he had no audit to share after the City spent $276,123.00 dollars and 2-1/2 years on audits.

In a Commercial Appeal article dated October 25, 2001 there was the following quote by Elkington.[Elkington said he wrote city officials in May, and again in the months since, about his readiness to transfer funds. "I've been repaid now. I'm happy," Elkington said.
Elkington, chief executive officer of Performa Entertainment Real Estate, the district's management company, said he was finished repaying Performa for money loaned to the district's operation during lean, early years.]

The real point here is shown in item #4 of Sara Hall’s answer to Mr. Gotten.

4. All annual, semi-annual or quarterly accountings of gross funds received and/or expenses deducted, which is determinative of the rent the city has received or is currently receiving for the rental of the demised property.
Answer: Since the City has not received any funds, there are no accountings of funds received.

In the BSDC/Elkington and Keltner Properties, Inc. lease, Section 5 it says “Lessee shall furnish Lessor and the City quarterly reports in writing, not later than the 15th day of each following quarter, showing the amount of Gross Rental, as hereinafter defined, from the premises during the preceding quarter. Lessee further agrees that it will submit to the Lessor and the City within one hundred and twenty (120) days after the expiration of each full lease year a complete statement certified by Lessee or an independent CPA if the Mayor so requires in writing, showing in reasonable detail the amount of Gross Rental Income from the premises during said period.

Therefore there should be 92 quarterly reports and 23 annual reports. But Ms. Hall says that there are no reports and zero funds received by the City. As a citizen of the City of Memphis and a taxpayer, I demand an investigation of this situation and call on the Mayor, the City Council and the FBI and the IRS (as was done in 1982)to immediately investigate this situation and audit the books and determine how much money is owed to the City from Beale Street. Federal, State and City money has been invested in Beale Street and taxpayers need an explanation.

Click here to see the City of Memphis/Beale Street Development Corporation lease.

Click here to see the Beale Street Development Corporation/Elkington lease.

Tuesday, January 13, 2009

January 13, 2009
A REPORT ON MEMPHIS CITY SCHOOL SALARIES, JOB TITLES AND BENEFITS

After filing a law suit I finally got the Memphis City School schedule of job titles, names, salary ranges and partial benefit costs. As you may or may not know, the Memphis City School system is the biggest local cost for taxpayers and the biggest public employer. The schedule that I received was 1335 pages. Before filing this report I was asked by a School Board official to submit it to Dr. Cash for review. I did this but have received no reply for over a week. Therefore I am submitting this report to the public. School budget funding is under consideration and this is information that is relevant.

I have been going through this massive document and trying to make sense of it. I have attached two spreadsheets on which I have made a partial analysis. One shows the 312 job titles from A to Z and the other shows the job salary ranges high to low. I have not finished yet but I wanted to make publish this so that I could get some public comments and input. My partial spreadsheets covers only about 11600 employees but there are over 17000 employees working at the Memphis School System. This does not cover the Shelby County School System as I as still trying to get their information.

I have also attached some sample sheets out of the 1335 pages. You will see job codes, salary grades, salary ranges, the FICA cost, the retirement cost, the insurance cost, the unemployment cost, the job title and the employee name.

I would appreciate public comments from people who know more about this bureaucracy than I do but some things I wondered about and noted below.

  • The school system pays 7.65% for social security and medicare and I presume the employees pay an equal amount. I assume that when they retire and reach medicare age, their state pension is reduced when they start receiving social security. As I understand it, other City and County employees pay only the medicare portion of social security which is 1.45%.
  • The school system pays 6.2% for the retirement pension fund and I assume the employee pays a matching amount. The system as I understand it is run by the state of Tennessee as the Tennessee Consolidated Retirement System. This is a defined benefit pension plan.
  • The medical insurance payment is substantial but it varies as a percentage of salaries. I assume this depends on whether the insurance is for the employee only or for a family. The difference can be as much as $6000 per employee. I do not know at this point how much the employee pays for this insurance but I will enquire about this.
  • As I understand it, teachers work 10 months during the 12 month year. I am not sure about holidays, sick days, personal days or any other benefits but I will inquire.

In looking through the list I find lots of high priced employees with titles that make you wonder what it is they do. Also note that executive directors make more than directors. Then there are 174 librarians, 1014 custodial helpers, 1098 educational assistants and 228 professional school counselors. It should be noted that the custodial helpers work at a relatively low pay scale but they receive insurance coverage the cost of which in some cases is almost ¼ to 1/2 of their salary.

I did not find the name or salary of Dr. Kriner Cash but he has a base salary of $258,000 per year. I will continue to try to get further information on the Memphis School System and the Shelby County School System and let you, the taxpayers, know what it is that you are paying for to the combined tune of $1.5 billion dollars.

Click here to see a partial list of job titles listed alphabetically


Click here to see a partial list of job salary ranges, high to low


Click here to see a partial list of the 1335 pages in this salary, benefit and job title report

Tuesday, January 06, 2009

TRANSPARENCY IN GOVERNMENT

TRANSPARENCY AT THE CITY VERSUS SHELBY COUNTY

I keep learning about government and the things I discover continue to amaze me. I recently complained to several City Council members that when they published an agenda on the internet and it contained a proposed ordinance, that the full wording of the proposed ordinance was not shown on the internet. For example, I have shown below two proposed ordinances that are on the agenda for the January 6, 2009 meeting.

11.        ORDINANCE to provide for Minimum Energy Efficiency in Rental Property, up for FIRST reading.

Ware                                     Ordinance No. 5292

12.        ORDINANCE to amend Chapter 2, Article XI, Code of Ordinance, City of Memphis so as to Change the Reporting Requirements for Small Businesses, up for FIRST reading.

Halbert                                    Ordinance No. 5293


 

I emailed this to Jim Strickland and he referred me to the City Council staff. They told me that the full wording was published in the Memphis Business Journal weeks ahead of it appearing on the agenda. I said that this was not satisfactory as it met the requirements of the law but not the spirit of transparency. (Remember the January 2001 pension resolution which slipped through without a remark). That will eventually cost the taxpayers millions of dollars in extra pension costs.

I complained again about Ordinance 5292 and 5293 which are on the upcoming agenda. I sent information to several city council members and the City Council staff person has agreed to change to procedure and in the future they will post all ordinances and resolutions in full with the agenda.

Then I checked the Shelby County website agendas and I find that Shelby County has been doing this since the early part of 2008 as they use the SIRE system. You can see this if you go to the following site. It is quite outstanding and includes also copies of public contracts.

http://agendapub.shelbycountytn.gov.

I then called the Shelby County Information Technology office and they told me that the system cost $400,000 and that the City of Memphis also has a similar system. Apparently they could have published all this information like the county but have chosen not to do so.

Take a look at the County system and then ask several questions.

  • Why has the City of Memphis not given the taxpayers the same public information that Shelby County has done?
  • Why have the City of Memphis spent millions on outsourcing their Information Technology to ACS whereas Shelby County has kept their IT in house and apparently done a much better job at a lower cost?

We need some answers to these questions and we need the full matching website information format that Shelby County is giving to their taxpayers.