Mon
Jul 30 2012
09:20 am
By: R. Neal

KNS: Knoxville Chamber denies commissioner's request to see private finances

ALSO: The article says "The Knoxville Chamber has already released records detailing how it spent taxpayer dollars..."

Best I can tell, the "records" consist of a one page form with line items such as "General Public Referrals: $23,775.00" which isn't very detailed. Why isn't the paper asking to see canceled checks and bank statements? Oh, right. This is the chamber, not the county mayor.

gonzone's picture

Romney style disclosure.

Romney style disclosure.
"You people" don't need to see their financial records.

Michael's picture

Apples/Oranges

Perhaps if someone handed them the cancelled checks and bank statements, and those implied some sort of shortcoming in the Chamber's accounting, the KNS might take notice.
~m.

fischbobber's picture

My favorites

Are columns 3 and 4 in Research data fulfillment. The different fonts and type sizes are clearly there to throw everyone off track.

Who is Rhonda Rice?

Tamara Shepherd's picture

*

Bullfeathers.

When I served on the Citizen's Panel for Community Grants, each of those grantees--which were also 501(c)(3)s--had to submit full and complete financial statements to us in order to be considered for county money.

They had to detail how they planned to spend their requested grant money too, of course.

But again, that detail on how they planned to spend any new money was needed above and beyond the complete financial statements explaining how they were already spending their money. All of their money. From every source.

I don't see a whit of difference between the Chamber's 501(c)(3) and every other one to apply for county money.

(I still have the application checklist we used here in my office, if Commissioner Norman or anyone else cares to take a look at it.)

Mike Cohen's picture

Chamber

It's not a grant...it is a contract for specific services.

reform4's picture

"Contract for Specific Services"?

Isn't that exactly what the County Mayor is transforming community grants into???

Mike Cohen's picture

Contract

It may be...but historically the Chamber has had a different type deal. They are not getting a grant.

Tamara Shepherd's picture

*

It sure seems to me to be a distinction without a difference, Mike...

Like Steve observes, all those county "grantees" are performing "specific services" for government. If they weren't performing them, the county government itself would have to perform them.

And WRT the Chamber, it's sounding like more and more people are proposing just that.

50 cents wasted's picture

Chamber record speaks for itself

In the 10 years Edwards has been at the helm, they haven't done squat, haven't recruited crap, and haven't relocated a damn thing to Knox County, other than the one Green Mountain Coffee distribution warehouse, which is about to meet a slow demise with Starbucks creating its own one cup platform and Green Mountain looking for a merger partner.

In Edwards' 10 years, all we have heard are excuses, excuse, alibi's, more excuses, pleas for more money, and more excuses of why he can't recruit and relocate business and industry to Knox County.

Pointing fingers at the school system. Really? Did VW, Amazon, Alstom Power and soon the tire company select Hamilton County because of the excellence in the Hamilton County Public School System? Are businesses relocating to Memphis and Nashville because of the unbridled success of the Shelby County and Davidson County Public School Systems.

All you are getting with Edwards is $250,000 plus perk worth of excuses and double talk, spin, and chicanery as to why business and industry cannot be relocated to Knox County.

Let's relocated Edwards and his staff to some other county, hire proven business recruitment/relocation specialists and get back to the business of improving the local economy rather than circulating worn out excuses as to why he can't get the job done. The sooner we export Edwards the sooner businesses and industry looking to relocate to Tennessee will get a straight shake from Knox County and a comprehensive presentation and a well assembled proposal to do something in town besides take over a burned out HolRob strip shopping center or a piece of worn out retail space in Turkey Creek that nobody can get to and nobody would want to work in anyway.

fischbobber's picture

V W

V W was site related, no we don't have a site, though Alcoa may be opening soon. That may have issues.

I'm not sure we want Amazon until they unionize (or start paying benefits).

The benefit of the Chattanooga school system is that there is a large number of private school graduates to draw your management pool from. Private school students would be somewhat sheltered from society and thus easier to train to have a lower level of human empathy and compassion, thereby buying into many economic myths that a student raised in a public education atmosphere would recognize as myths from their time at school. When you can get lower and middle management to view employees as less than optimal humans (i.e. if my workers had anything on the ball, they wouldn't be working for me) it is easier to create a pressure cooker environment and churn employees. Modern business theory says this is a good thing as it keeps wages low.

On the whole, including private and public, I think Knoxville has a better education system than Chattanooga. Over the board, I think we produce better people.

Barker's picture

yes

You're right that Chattanooga got VW because it had a large industrial site next to the interstate. Knox County doesn't have a parcel anywhere close to that. After the Brookside property went to Holston Gases, Knox County doesn't even have a single large parcel of industrial property with direct interstate access. Again, Knox County has ZERO property with direct interstate access available to potential employers.

I disagree about education relative to Knox and Hamilton counties if you include private schools. Chattanooga has Baylor and McCallie, but you evidently don't understand the student bodies of those schools. They are not the management pool, as might be expected at Webb, they are the ownership pool. They will put their companies wherever they want.

Mike Cohen's picture

Economy

We may not have landed a VW, but this statistic is still very important. These are figures from the state as of last Friday:

UNEMPLOYMENT:
Knoxville MSA 7.0
Chattanooga MSA 8.2
Nashville MSA 7.3
Memphis MSA 9.6

Individual counties
Knox 6.7
Hamilton 8.3
Davidson 7.3
Shelby 9.7

SnM's picture

Mike Edwards controls the

Mike Edwards controls the county's unemployment rate through the chamber? His PR department is more powerful than mere mortals can understand.

fischbobber's picture

Chamber?

How does this statistic relate to the chamber?

fischbobber's picture

The obvious problem

Is that the financial disclosure would appear to be a guesstimate. Everything is rounded to a five dollar amount, which would suggest that it is either not going to match an alternate paper trail or that there isn't one.

Would this be a reasonable discrepancy and is there a plausible explanation? Is it possible that someone is trying to sneak this by Donilla on the theory that he may be gun shy? Why is John Lawyer listed at the top and not the bottom of the report? The answers aren't popping out at me.

Mike Cohen's picture

EconDev

To me the unemployment rate is a good indicator of economic development efforts.

fischbobber's picture

Chamber?

Is there any direct evidence to link the chamber to actual economic development?

Most of what I have read about the chamber centered on Midway. Most of what I knew about Midway, was based on the study of the aquifer and watershed and the resulting impact on that section of the French Broad, and a few chance conversations with some residents, which generally came back to ground water quality. Midway did not seem like a very good idea to me.

Beyond that, there doesn't seem to be much general agreement on the Chamber and if indeed they are taking credit for the area unemployment rate, I would hope that they could back that claim up with concrete evidence.

In addition, I have my concerns as to just what they are selling as a labor force. The "modern" southern thinking about the value of labor is that it is worth what business owners say it is worth. Their definition of a free market is a bunch of good ole boys sitting around and setting wages based on what they say the labor is worth. It is very much like the old slave market theory whereby plantation owners viewed slaves as commodity to be bought and sold no differently than lumber or timber. This view of labor lowers our living standards and raises the cost of living for everyone else.

Is the chamber recruiting business that recognize the real worth of labor, and that is to say, are they recruiting businesses that are committed to paying their labor force a realistic percentage of what they produce?

I look forward to learning more about the Chamber so I may form an intelligent opinion, (or at least as intelligent opinion as I am capable of.)

fischbobber's picture

Actually

The work I do on this site, and my writing and volunteer work I do in general, I do for free. I saw a community need in that, there are lots of academics and politicians trying to spin their views, but not many people from around here willing to say, "Hell, a gallon of gas is only 3.50 and it's just 8 miles from here, I'm gonna go look."

This chamber stuff does not seem to be in sync with what I know about local business or good working class jobs, but I would like to know more.

I look forward to Lisa Starbucks take on all this.

Rachel's picture

I do believe metujl was

I do believe metujl was talking to Mike Cohen.

trobinson's picture

Out of the top 10 employers

Out of the top 10 employers in the Knox region 5 are government entities employing nearly 70% of the employees in the top 10. Of the remaining 5 in the top 10, 3 are non-profit medical centers--one being UT. The reason Knox Co unemployment rate is relatively low (as it always is) is because of the high number of public subsidized/government employers--not because of the Chamber. If the Chamber went away tomorrow I"m not sure anyone would notice.

bizgrrl's picture

Exactly.

Exactly.

gonzone's picture

Second

You are correct.

Barker's picture

Frist and last, the Knoxville

Frist and last, the Knoxville Chamber needs to be held accountable for fulfilling the obligations of its contract with Knox County. I think Mike Edwards and Rhonda Rice and the board of the chamber would say the same thing. In fact, chamber spokesman Anthony Welsch said the receipts are available for review. So anyone can go view them at the chamber offices on Market Square. Those who post here who fancy themselves reporters can knock themselves out.

Cohen is correct (as much as it pains me to say so) that the chamber has a contract, not a grant. And there is a difference. Organizations that get grants do not typically perform the functions of government. The Boys & Girls Club, the Knoxville Symphony, Blount Mansion and others that receive grants aren't doing government business. Governments tend to issue contracts for outsourcing work they are responsible for doing. Such is the case with the chamber.

That brings me to the term "functional equivalency," which people need to understand if they are to parse all these relationships. If an organization, be it for-profit or nonprofit, does work that is the exclusive province of government, it is the functional equivalent of a government agency and subject to the public records act.

The courts have established a four-part test to see if an organization falls under that category. It takes a totality of the circumstances (not all four parts) to determine whether an organization is the functional equivalent of a government agency. I won't bore you with the decisions and opinions here, but if you're interested, Google is your friend.

A good example of functional equivalency is the organization formerly known as the Knoxville Tourism and Sports Corp. State law requires that county governments spend a portion of their hotel/motel taxes on tourism promotion. Knox County contracted that out to KTSC. KTSC's revenues come almost entirely from tax dollars, and it performs the function of tourism development required by state law. It is, therefore, the equivalent of a local government agency and is subject to the public records act.

But what of organizations that only get a portion of their income and spend a portion of their resources on government functions? There is a state court decision form the past few years that addresses that. An inmate sued Corrections Corporation of America to obtain documents related to its management of a prison in Middle Tennessee. The court ruled that CCA's records of its operations of that particular prison are subject to the state's open records act because running a prison is a state government function. The court did not deem that all CCA records were public, but those dealing with that particular prison were.

That gets me back to the chamber. The chamber is the functional equivalent of a government agency only regarding its execution of its county government contract. In all other respects, it is a private organization and not subject to the public records act.

County Commission does not have to contract its economic development functions to the chamber, which brings me back to accountability. The chamber should be accountable to the taxpayers for the work it does on their behalf. We should scrutinize their efforts. If they fall short of their contractual obligations, they should be held accountable.

fischbobber's picture

Thanks

Good Overview.

I may just follow your advice if time permits.

rikki's picture

both sides of the ledger

The chamber is the functional equivalent of a government agency only regarding its execution of its county government contract. In all other respects, it is a private organization and not subject to the public records act.

Nope, they also make themselves functional as government when they attempt to write or amend laws and lobby votes. There is an accounting standard on the other side of their work, the expense side, and when Tom McAdams offered Commission a rewrite of a publicly drafted plan, he did political work that calls for an accounting in and of itself.

The Chamber does not have a 501c4 arm under which to classify the McAdams expense nor expenses they may have incurred when Edwards, Askew, Rice and others lobbied Commission in their official roles.

Chamber officials have operated notoriously as lobbyists, and the public has as much right to know how their 501c4 activities are accounted for as they do to know how Knox County funds were classified. Furthermore, the state and/or IRS need to know about the Chamber's pre-permit 501c4 behavior so they can consider the Chamber's application an ask of forgiveness rather than permission.

Mike Cohen's picture

Clients

I don't get paid for this, I always disclose if I have a client about which I am writing.

rht's picture

is the chamber a 501c3?

is the chamber a 501c3? if so, they would have to disclose a fair amount annually on form 990. But i don't find them on IRS list of 501c3 entities.

I do find them listed in TN Secty of State list as a nonprofit corp, but that doesn't necessarily mean 501c3.

just asking. I have not followed this thing closely

rht's picture

501c6

to answer my own question, the 990 on Guidestar says knox chamber is a 501c6. This makes sense ...I'm learning... since 501c6 is for business leagues and chambers of commerce. They are apparently not subject to 501c3 restrictions on engaging in political activity, although members are restricted from taking tax deduction for portion of dues used for such activity.

Mike Cohen's picture

ED

While I realize I am doing the opposite of singing to the choir, I just want to make sure I have made my point, which is this: If anyone (in this case the Chamber) is the staff for Economic Development then you can't just blame them for what you perceive as failure and exclude them from success. A low unemployment rate is a success, not landing a VW a failure.

By the way, I actually pay the Chamber. I am a member and personally I have gotten value out of it, mostly through networking events where I have met people and established relationships that could lead to business.

trobinson's picture

Unfortunately you're

Unfortunately you're parroting two fallacies that the Chamber can't let go of:
1) The Chamber has had little impact on the unemployment rate in Knox County. (see my previous post)
2) Knoxville was NEVER seriously in the running for VW. Hamilton County had been given hundreds of acres of a former superfund site (Army Munitions site--it's still pretty dirty BTW) cleaned up by fed and state governments, near 3 interstates and 2 rail lines, plus it was a TVA Megasite. None of which Knoxville has. The State, Fed and local govs poured HUNDREDS of MILLIONS of $$ into this project.
So please retire the "those mean people at Midway took away VW" whine. It was never a possibility. Anybody that thinks that Knoxville was in the running doesn't understand Economic Development.

fischbobber's picture

Guidestar

They have a Guidestar listing with their 990's and IRS filings. I didn't log in because I've got to be somewhere, but isn't that where one would start an inquiry into their spending?

At the very least the compliance reports they are filing should give an indication as to what the citizenry has a right to know.

rht's picture

990 at guidestar

2011 990 is viewable at guidestar (you might have to register) at (link...)

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