Tue
Jul 31 2007
07:23 pm
Lobster Tales
By: Sandra Clark

Over at Knoxnews.com, Rebecca Ferrar is reporting that Ragsdale is shutting down the "non-taxpayer-funded hospitality account" AKA the liquor fund.

Dwight Van de Vate says it's not been decided yet how the county officials will handle dinners at pricey restaurants and such.

How about they buy their own dinners ... is this asking too much? -- s.
CBT's picture

“I make no apologies for

Submitted by CBT on Tue, 2007/07/31 - 10:21pm.

“I make no apologies for raising private money to support community initiatives,” the mayor said.

What amazes me about this comment is that he says in one breath it's the right thing to do and in the next says he's stopping doing it. Huh? Is it just because some reporters asked some questions? I think we know the answer. It was a shady deal from the beginning.

If other questionable expenses are found, we'll hear the same old refrain from the Mayor's office, 'we closed the account, it can't get more closed, we need to talk about seniors and children'.

As for me, I prefer the "Booze Budget".

R. Neal's picture

I think this discussion

Submitted by R. Neal on Wed, 2007/08/01 - 7:19am.

I think this discussion should be extended to the Great Schools foundation. I fail to see the difference.

Tamara Shepherd's picture

Headline wrong

Submitted by Tamara Shepherd on Wed, 2007/08/01 - 8:25am.

Sandra, Chad, both the headline and the first paragraph of this story are inconsistent with Ragsdale's actual quote that follows. He doesn't say that he's suspending the Hospitality Account at all.

What he says is that he will transfer custodial oversight of the account from his office to an outside overseer, like the East TN Foundation or the FOL. He says that he will direct future contributions there.

Somebody check me, but that's what I read...

(link...)

Sandra Clark's picture

Liquor Fund

Submitted by Sandra Clark on Wed, 2007/08/01 - 9:04am.

Folks: This account has been funded almost exclusively by county contractors and vendors, many of whom got those contracts without a bid requirement. I read Dwight's statement (seen only in the KNS since the Knox County public relations office has cut off the Shopper because we don't behave) to say that the county is closing the account -- no more money will come in or go out.

Will the droid C3PO Hill be reimbursed for $5,000 taken under false pretenses? No question, no answer in the KNS. -- s.

SnM's picture

I may be misunderstanding

Submitted by SnM on Wed, 2007/08/01 - 9:10am.

I may be misunderstanding the sentiment here, but even if a satisfactory answer wasn't given, it looks like the question was at least asked. From the article:

The mayor is correcting a problem with a $5,000 CH2M Hill donation for Homeland Security brochures. The county paid for the publications, but a transfer wasn’t made from the hospitality fund to pay the county back, Norwood said. “That was simply a bookkeeping error that we are fixing now,” she said.

Is this the $5000 referred to?

Knoxquerious's picture

When the audit hits the rest

Submitted by Knoxquerious on Wed, 2007/08/01 - 9:18am.

When the audit hits the rest of the county (KCSD, County Commissioners Offices...etc) and improprieties are found, will some of the harsher critics posting be so quick to pounce? My guess, some will and some won't. Just wait...

Tamara Shepherd's picture

Law department guidance slow, garbled

Submitted by Tamara Shepherd on Wed, 2007/08/01 - 12:12pm.

I hadn't read those supplemental PDF files at the N-S site when I posted on this thread earlier. Since I printed and read them, I think I better understand the seeming double-speak coming from the mayor's office. Looks to me like maybe the law director's office has tendered some double-speak to the mayor, creating the confusion.

In his first (June 18) letter to Arms, Creekmore offers some "suggestions," but not legal opinions citing applicable state code, on how to account for the hospitality fund. Among his suggestions are that the fund "should be subject to external audit," but that monies might nevertheless be "disbursed outside of official funds." Creekmore does not indiate any need for transactions on the account to involve County Commission or to impact the county's general fund

Presumably, then, this is the basis for Ragsdale proposing a "fix" in terms of establishing outside oversight of the account by either the East TN Foundation or FOL.

In his second (July 13) letter to Arms, though, Creekmore acknowledges that he has subsequently reviewed TCA 5-8-101. That statute, he says, requires that when a "gift or donation is conditional, or is subject to a restriction, such as for a specified event...then the offered gift or donation must first be accepted by the Knox County Commission and must be used by the county subject to the terms of such conditions or restrictions."

Creekmore also adds that, per the statute, "...if it is not a conditional or restricted gift or donation, then it must be deposited into the county general fund and appropriated in the usual way."

Creekmore then apologizes for having failed to "add" these supplemental comments as a sixth item in his earlier letter.

In fact, his supplemental comments in the second letter appear to invalidate the suggestions he made to Arms in the first letter. That is, an action on the part of the mayor's office to establish outside oversight of the account is not sufficient to meet the requirements of the statute.

In light of the way guidance from the law department has "trickled in," I can see why comments from the mayor's office are a bit garbled at this juncture.

It does sound like, in the future, the mayor's office will have less control of the "reinvented" account than it has in the past.

Creekmore's description of the statute clearly allows such an account, though, validating Ragsdale's concept, if not his office's accounting practices.

Rachel's picture

Here's an example I've been

Submitted by Rachel on Wed, 2007/08/01 - 12:37pm.

Here's an example I've been wondering about. Many special events at the library are sponsored by private organizations (that's the only way they can happen). Among these are the Children's Festival of Reading, Movies on Market Square, etc.

These funds did not come through Friends of the Library when I worked there, although that organization has been a pass-thru for other things (like grants).

What I don't know is whether the private organizations paid the bills directly (which is what Friends do when they sponsor something for the library) or if they just wrote a check to the library. If the latter, did that go into the "hospitality fund" or some separate account? And if the latter, is that now verboten also?

Things are always more complicated than they appear on the surface. Saying "all county $$$ should go into the general fund and be budgeted by Commission" may sound good. But I wonder if it's practical for things like I describe.

Anyone got any more info on how this works?

mbradley's picture

I noted the interesting

Submitted by mbradley on Wed, 2007/08/01 - 9:08am.

I noted the interesting choice of words used to describe all this as well.

From the News Sentinel Report-

It’s unclear how certain expenses, such as dinners at high-end restaurants previously paid from the account, will be handled.

“We haven’t decided that yet,” said Dwight Van de Vate, the mayor’s spokesman. “That’s a question we’re still sorting out.”

Surely there will be a swift and direct follow up to this quote... It sure leaves an impression that there's a big meeting going on up on the 6th floor to figure out how in the heck to pay for those fancy meals.

I don't mean to hijack the thread but I did notice the comment counter now on the headlines on the NS website. Very interesting considering the Michael Silence piece and debate on this site over the past few days...

Catfish's picture

Let me get this

Submitted by Catfish on Wed, 2007/08/01 - 12:23pm.

Let me get this straight:

They do consult the law director about the hospitality fund.

They do not consult the law director before responding to a subpoena from Herb Moncier and releasing Hutchinson's personal data.

Do I have it straight?

(link...)

CBT's picture

It's amazing the Shopper is

Submitted by CBT on Wed, 2007/08/01 - 12:47pm.

It's amazing the Shopper is cut off given it now reaches over half of Knox County with free, home delivery. At the chance the Mayor could get some positive coverage or offer explanations (which the Shopper should include), 'press releases' and other information should be sent to the Shopper. Otherwise, it seems like spoiled little kids...'we'll just take our ball..ahem, news...and go elsewhere'.

Sorry for the off-topic comment.

Sandra Clark's picture

Double Speak

Submitted by Sandra Clark on Wed, 2007/08/01 - 3:33pm.

The mayor is correcting a problem with a $5,000 CH2M Hill donation for Homeland Security brochures. The county paid for the publications, but a transfer wasn’t made from the hospitality fund to pay the county back, Norwood said. “That was simply a bookkeeping error that we are fixing now,” she said.

The reason this is an unacceptable answer (OK, I'll concede that the question was asked) is that it is double-speak. What does this mean? Will Ragsdale reimburse Knox County for the printing bill?

Maybe it's because the Shopper does not simply print what they say whether it makes sense or not that the Mayor's Office won't send us press releases. -- s.

Tamara Shepherd's picture

Text: TCA 5-8-101

Submitted by Tamara Shepherd on Wed, 2007/08/01 - 3:59pm.

Rachel, it looks to me like Creekmore's counsel to the mayor's office is applicable to the library's operations, too, since it speaks to what "a county" is authorized to do. You be the judge, though. Here's the complete text of the statute:

5-8-101. Sources of county revenue — Gifts and donations. —

(a) County revenue is derived from taxes on property, privileges, litigation, merchants, peddlers; from fines and forfeitures; and from money remaining unclaimed more than two (2) years in clerks' offices.

(b) Notwithstanding any provision of law to the contrary, a county is authorized to accept and receive gifts and donations of money, intangible personal property, tangible personal property and real property. If any such gift or donation is offered subject to conditional or restrictive terms, then the gift must be accepted by majority vote of the county legislative body and must be used by the county subject to the terms of such conditions or restrictions. If an unrestricted gift or donation of money is accepted and received, then such money must be deposited in the county general fund and must be appropriated and expended in accordance with county budgetary procedures. If an unrestricted gift or donation of personal or real property is accepted and received, and if the property is subsequently leased or sold, then the proceeds from such lease or sale must be deposited in the county general fund and must be appropriated in accordance with county budgetary procedures.

[Code 1858, § 482; Shan., § 644; mod. Code 1932, § 1035; impl. am. Acts 1963, ch. 14, § 1; Acts 1979, ch. 23, § 5; T.C.A. (orig. ed.), § 5-801; Acts 1999, ch. 109, § 1.]

(link...)

Rachel's picture

Thanks, Tamara. I see a lot

Submitted by Rachel on Wed, 2007/08/01 - 4:09pm.

Thanks, Tamara. I see a lot more bookkeeping work in the future of the FOL staff.....

Catfish's picture

Rachel

Submitted by Catfish on Wed, 2007/08/01 - 4:19pm.

any idea if the FOL agreed to what Ragsdale proposed yesterday?

Rachel's picture

Catfish - don't know; not

Submitted by Rachel on Wed, 2007/08/01 - 5:36pm.

Catfish - don't know; not working for FOL anymore (although I'm still a member). I would assume they would agree, but can't say so for sure.

Tamara Shepherd's picture

Review how expenses were "coded" & make journal entry

Submitted by Tamara Shepherd on Wed, 2007/08/01 - 4:30pm.

"What does this mean? Will Ragsdale reimburse Knox County for the printing bill?"

Sandra, it seems like the Hospitality Fund, with a balance of $3344.11 (per that PDF at the N-S site today), CAN'T reimburse the county the $5000.00 owed just this minute, but...

If this task were mine, I'd be looking for prior charges to the Hospitality Fund totaling $1655.89 (the shortfall) that might legitimately be paid for from the mayor's office budget, instead. I'd "re-code" those expenditures to impact the mayor's office budget rather than the Hospitality Fund, then use the subsequent "found money" in the Hospitality Fund to "reimburse" the county.

(Disclaimer: My assumption is that the Hospitality Fund doesn't exist in some separate bank account, just as a separate non-taxpayer budget item, but I dunno.)

After all, the expenditure the $5000 donor wanted to support did actually take place...

R. Neal's picture

Wow, something that's pretty

Submitted by R. Neal on Wed, 2007/08/01 - 4:05pm.

Wow, something that's pretty clear for a change.

bill young's picture

Make this clear to me

Submitted by bill young on Wed, 2007/08/01 - 4:55pm.

TCA 5-8-101..this is Tennessee law?
Has the way this hospitality fund been run against the law?

A while back didnt Tamera say something about her looking into the recall or ouster law?

I googled it its 8-47-101.

Tamara Shepherd's picture

Right on both, Bill

Submitted by Tamara Shepherd on Wed, 2007/08/01 - 5:26pm.

You're right on both counts, Bill.

Tennessee Code Annotated 5-8-101 is the statute dictating the process for the county's receiving gifts or cash donations (and yes, it appears it has not been accounted for properly, but the county *is* able to solicit/accept such gifts earmarked for mayor's office applications).

Tennessee Code Annotated 8-47-101 is the statute dictating for what reasons an elected official may be ousted from office (but hiring a Finance Director who isn't an accountant isn't one of them).

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