published Sunday, November 25th, 2012

City's greedy gifts

With Thanksgiving over and Christmas looming, now is the time that many of us begin writing checks to support favorite charities and other nonprofits. Nothing is more selfless -- or more American -- than helping those who do good work with your hard-earned money.

Sadly, the Chattanooga City Council has flipped the beautiful notions of unforced kindness, altruism and charity upside down -- and beat them silly.

City leaders took $1.5 million from the pockets of Chattanooga taxpayers last year, and will take nearly that much again this year, to hand over to the charities and non-profits they support. The people actually funding the handouts have little say about what charities City Council members subsidize with public money, even if the organizations are controversial or offensive.

To make matters worse, some of the charities receiving public funds have millions of dollars sitting in the bank. Others have staff members who take home eye-popping salaries. A few of the handouts even go to organizations despite outrageous conflicts of interest.

The most frustrating part, however, is that every dollar Chattanooga politicians take from residents to blow on a politically connected organization capable of effectively schmoozing members of the City Council is one less dollar Chattanoogans have to help an organization they support.

A long list of handouts

In the last three fiscal years, Chattanooga elected leaders dispensed more than $3.8 million of Chattanoogans' cash to a total of 31 nonprofit organizations.

This year alone, the city forced taxpayers to fork over $1.46 million to subsidize councilmembers' favorite organizations.

No matter where you fall on the political spectrum, if you're a Chattanooga resident, the city council used some of your tax money to fund an organization that will frustrate, if not offend, you.

Folks concerned about the separation of church and state, or who aren't Christians, won't appreciate the city's handouts to the United Methodist-affiliated Bethlehem Center and Senior Neighbors, run by the Catholic Alexian Brothers organization.

The nearly quarter-million dollars used to fund WTCI, our local PBS affiliate, will annoy taxpayers who believe that their money shouldn't be used to support public broadcasting.

Opponents of corporate welfare and schemes to bribe already-rich folks to set up businesses in the Scenic City will be peeved at giveaways to non-profit outfits such as the River City Company and Choose Chattanooga.

The tens of thousands of taxpayers in Chattanooga who don't believe their money should be taken to subsidize arts programs, museums, sporting events or festivals will be shocked to learn that, year after year, city lawmakers pour hundreds of thousands of dollars into funding these types of projects.

To make matters worse, despite this mountain of questionable spending by city leaders, there's very little evidence that all of these handouts have done anything to improve Chattanooga in any clear, demonstrable way.

Rich getting richer off of taxpayers

Many of the groups receiving giveaways from the city council aren't small charities struggling to survive. They are some of the some of the largest nonprofit corporations in Southeast Tennessee, with fancy fundraising operations, highly paid staff members and millions of dollars in the bank. In other words, groups that need a government hand out the least.

The River City Company, for example, has net assets of nearly $16 million and $800,000 sitting in the bank, according to 2011 documents filed with the IRS. Further, Kim White, the president of the economic development-focused nonprofit, earned $296,000 last year in combined salary, bonuses and benefits, according to the documents.

Despite River City's wealth -- and the ability to pay its president a salary that most Chattanoogans could only dream of -- the city council snatches $67,500 from struggling city taxpayers every year to subsidize the rich nonprofit.

White is one of several nonprofit leaders whose considerable salary is subsidized by Chattanooga taxpayers.

Paul Grove, the president of the Chattanooga PBS station, raked in $159,000 in 2011. The station hauled in $80,000 in taxpayers' money last year and will devour another $85,000 this year. Dan Bowers of Allied Arts and Earl Medley of the Fortwood Center also make comfortable six-figure salaries while collecting handouts from taxpayers to help fund their organizations.

Conflicts of Interest

For years, Sally Robinson, the retiring District 2 Chattanooga Councilwoman, has voted to direct tax dollars to a nonprofit organization that ultimately funds part of her own daughter-in-law's salary.

Allied Arts typically receives more taxpayers' money from the city than any other nonprofit organization. This year, the arts outfit snagged more than a quarter-million dollars in tax dollars. In the last three years, the city council dispensed $564,000 to Allied Arts.

Each year, Allied Arts passes along a portion of the money it receives from the city to other organizations, including the Arts & Education Council of Chattanooga. In 2011, the Arts & Education Council received $32,000 courtesy of Allied Arts -- some of which went to fund the salary of its executive director, Susan Robinson.

Susan Robinson happens to be Sally Robinson's daughter-in-law.

Apparently unconcerned by this outrageous conflict of interest, Sally Robinson annually fails to recuse herself from votes regarding city funding for Allied Arts, even though she knows that some of that money would eventually find its way to a member of her family.

Robinson isn't the only council member who doesn't let a conflict of interest prevent her from steering tax dollars to organizations.

District 3 Councilmember Pam Ladd serves as the vice chairman of Choose Chattanooga's board of directors. Year after year, city lawmakers make the ethically indefensible decision to hand out money to Choose Chattanooga, despite Ladd's powerful position within the organization.


City councilmembers must end the repugnant practice of giving away constituents' money to organizations they think are worthwhile. Instead, they should let city taxpayers keep those dollars in their pockets so that they have more money to give to the organizations they believe in.

It's disrespectful that city leaders obviously think their preferred nonprofit organizations are more important than taxpayers' favorite charities.

Beginning with next year's budget, city councilmembers must be responsible enough as lawmakers -- and respectful enough of taxpayers -- to stop the unseemly and pompous practice of supporting the nonprofits that lobby them most effectively with city residents' money.

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aae1049 said...

Amazing piece. The public deserves to know how these City Council triflers are coverting public taxpayer dollars into their favorite charity.

However, the corporate welfare thieves like Kim White, making almost $300,000 and then taking hard earned property tax dollars from working class families, needs to be addressed. River City Company, Allied Arts is a pack of thieving frauds. I want them out of my share of property tax dollars. They don't need the money. They are a wealthy corporation.

"The River City Company, for example, has net assets of nearly $16 million and $800,000 sitting in the bank, according to 2011 documents filed with the IRS. Further, Kim White, the president of the economic development-focused nonprofit, earned $296,000 last year in combined salary, bonuses and benefits, according to the documents."

November 25, 2012 at 12:22 a.m.
ivarussell said...

Excellent work Drew. That is the fiscal conservative I know and love.

November 25, 2012 at 12:48 a.m.
nucanuck said...

Public-private partnerships have been at the core of Chattanooga's rebirth and in almost every case the City of Chattanooga receives far far more than it invests. Were those partners to withdraw, every Chattanogan would be poorer for the loss.

Again, Drew is one long lost bird!

November 25, 2012 at 1:29 a.m.

The City Councils favorite charities, rich corporations, where they serve on the boards. Taking from working class families to give to their rich friends. We just pulled the Teir II charities from online sources.

November 25, 2012 at 2:14 a.m.
cooljb said...

I encourage everyone to share this article. Anyone that doesn't agree that this stealing of the tax money is wrong, supports the stealing of the tax money and probably has something, personally to gain from it in one way or another. Why else would someone approve the theft?

November 25, 2012 at 6:47 a.m.
jjmez said...

No matter who is in place, they're going to always pay themselves first with hefty salaries/even if they're the ones getting the rest of you all riled up with your pitchforks, burning torches in preparation to overthrow your local government with shouts of ________MY TAX DOLLARS! ---------------

November 25, 2012 at 8:08 a.m.

jjmez, are you suggesting that citizens just ignore blatant conflicts of interest and robbery of taxpayers? Opposition of these actions of our city council does not equate to opposition of good government. It is very disappointing that you would defend theft of taxpayer resources. Everyone favors good government.

November 25, 2012 at 3 p.m.

Poor Big Bird, still the enemy...for some odd reason.

Devouring money? C'mon, can't we at least have the integrity to identify how the money was spent first?

November 25, 2012 at 3:26 p.m.
aae1049 said...

Happy, Here is where it all gets to be a problem. Because these nonprofits have a nonprofit corporate charter, they are not subject to open records.

November 26, 2012 at 11:32 p.m.
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