Money For Nothing
At a Birmingham City Council meeting on August 27, two gentlemen representing the multimedia companies Corporate Plus and Plus Radio addressed the Council. According to a presentation that, by all accounts, was completely haphazard, the organization planned to broadcast city high-school football games on radio station WJLD, and during each game award a $1,000 scholarship to one of the schools’ outstanding student athletes. Council member Gwen Sykes was enthusiastic about the plan, claiming that “these young men from my district have a passion for giving back to the community.” That was an unfortunate choice of words by Sykes, because to refer to this particular endeavor as “giving back” is somewhat misleading. The gentlemen making the proposal were actually requesting several thousand dollars from the city council to fund the program.
If the Council really is capable of confusing giving for taking, that may explain in part why dozens of agencies, organizations, religious groups, and various businesses were able to obtain funds from City Hall this past summer. In numerous instances, the Council spent tax dollars on programs, events, and services that, at the very least, are questionable. In some cases, these expenditures can’t be explained at all-by anyone working for the city. The spending in question goes beyond the everyday business of providing for police and fire departments, streets and sanitation functions, and the maintenance of services and infrastructure that keep a modern city operating. In fact, it is difficult to categorize so many varied expenditures, except to state that they constitute “other” spending. We can report, nonetheless, that from May 7 to September 17, the Council found a way to hand out more than $4 million to practically anyone who came asking for cash.
This does not imply that all of the organizations that received tax dollars from the Council are illegitimate enterprises. Many appropriations of tax dollars were for programs and events that seem reasonable, if not entirely essential. What is questionable is the wording of contracts that determine (or in many cases fail to determine) how specific funds are to be spent by certain organizations. Furthermore, contracts with the city often fail to provide details about how the success of a specific program is measured. Also questionable is the fact that the Council itself cannot explain precisely what is being done with these tax dollars, much less why, or who should be held accountable if it is discovered that someone is wasting resources. This begs the essential question: if elected officials don’t fully understand a specific expenditure, why do they support that spending?
Not every Council member does, at least in spirit. But there is a mindset at City Hall regarding spending that ranges from brazen to casual to downright clueless. Brazen might describe the Council’s tab for a recent weekend retreat in Prattville, Alabama, that ran into the tens of thousands of dollars. The retreat was ostensibly held so that the city’s leaders could “get to know each other better.” Clueless certainly characterizes an instance in June involving two Council members with whom we spoke concerning certain organizations that had requested money from the city. When asked if two particular organizations were legitimate, both Council members assured us that it didn’t matter, because there were not enough votes to pass the resolutions that proposed the expenditures. It was left to us to inform them that the resolutions had been placed on the Consent Agenda, which meant that the resolutions passed-with no objection from either of those two Council members.
Brazenness and cluelessness don’t apply in most cases, because the attitude about spending money is almost always a casual one. By way of example, consider a statement by one City Hall insider, who spoke on the condition of anonymity: “Some of these organizations have been receiving tax dollars from the city for almost a decade, so you can’t just cut ‘em off.” Consider also the concern over spending expressed by Council members Elias Hendricks and Carole Smitherman. Regarding an August 13 resolution to grant funds to some after-school programs conducted by private organizations, Hendricks said, “We keep spending money, and there’s no evaluation. Somehow we need to get a handle on what’s being done . . . and its effectiveness. I’m pretty astute at looking at budgets, and this confuses me.” Smitherman replied, “I feel you, Elias. We do need to know when our programs are working. In the future I hope we can do better.” These statements might lead a casual observer to believe that at least two city councilors were closely watching our tax dollars, but the proposal to which they referred passed unanimously. This pattern is common but puzzling; the Council furrows its collective brow, promises to do better, then votes for spending anyway.
Other Council members have expressed doubts and objections regarding spending, their concern falling into the two main categories of redundant expenditures and lack of accountability. Consider Councilor Valerie Abbott’s comments about how tracking is done: “There is someone in the Mayor’s office, the administrative side of the house, that is supposed to keep up with all this stuff and is supposed to pay them site visits and do things like that. I suspect that at least a portion of these organizations are either not doing what they say they’ll do or they’re doing such a poor job of it that we shouldn’t be giving them public funds. I asked how we check up on them and found out that there was an annual visit-one person for the whole city that is supposed to check up on these people-and they call them ahead of time to let them know they’re coming . . . ”
Council President Lee Loder also asserts that much of the responsibility lies with the Mayor’s office. Concerning how funds are tracked, he says, “The administration ultimately is responsible for keeping up with or receiving periodic reports for those particular groups. And we’ve asked as a matter of routine that they provide those reports to us before we make a final decision, so sometimes we get them in time, sometimes we don’t. Lots of times budget items will be annual line items, kind of like annual appropriations. There have been some strong inquiries regarding each group and what particular services they provide as of late, and I don’t know exactly what the discussion was about that. But as a general rule, there are pretty serious inquiries regarding what happens to the funds.”
Ask and Ye Shall Receive
There are some City Hall insiders, past and present, who won’t speak on record about specific accountability issues, but who do express concern, and in some instances, an almost fatalistic dismay about spending practices:
“You’re not going to find any tracking for a lot of this money, because there’s no scrutiny and in some cases there never has been. Some of these nonprofit organizations began under Richard Arrington, some under the former City Council’s ‘consulting fund’ which many times was just a carte blanche giveaway program for political supporters. A lot of times the problem isn’t with what the group is trying to accomplish, but who’s in charge of it. Giving money to a totally worthwhile operation still doesn’t really cut it if incompetence is an issue. But no one sitting on the Council is going to raise that question about a minister or a nice lady operating a tutoring program, or some group helping kids with drugs or AIDS education. Those are all ‘yes’ votes, when it comes to money. Anybody planning a big concert or a festival gets a ‘yes’ too, because it’s always about putting us on the map or helping the city’s image. Everything is an intangible, so, politically, it’s hard to say no.”
Another source familiar with budget operations said, “This is a bunch-the Mayor’s people and the City Council-that lacks curiosity, to say the least. I don’t know if it’s laziness or if they are just new on the job. But it’s been almost a year now and I haven’t seen a single substantive investigation or questioning of who’s doing what with which money.”
Former Councilor Jimmy Blake, who was often a thorn in the side of two Birmingham administrations, also wonders if tax dollars are going to the right places:
“Well, just for one example, you have overtly religious organizations conducting after-school programs or some kind of work with school kids in the inner city. There’s nothing wrong with that, but I thought we were supposed to have separation of church and state. Then you have to consider that some of these groups were politically active with Arrington’s coalition, and now you’ve got two reasons not to give them any money. Throw in the fact that sometimes no one in a position of responsibility at City Hall can tell you precisely how that group spends those funds, and if that doesn’t bring it all into question, I can’t imagine what would.”
The most vociferous critic of how City Hall spends tax dollars is Councilor Joel Montgomery. He is often the lone “No” vote against resolutions that call for questionable spending, mainly because he is concerned “that money is not being put in the right places.” Montgomery is especially dubious of the many nonprofit organizations that seek funding from the Council.
“People were lining up outside my office door when I first got to City Hall. Everybody walks up and says ‘I’m the such-and-such agency and I’m going to help kids, or small businesses, or whatever.’ You got people filing for 501(c)(3) tax exempt status, nonprofit organizations, and they come to us with these magnificent plans to, as they put it, ‘do something for the young people.’ Not only that, there are a dozen or so outfits that are supposed to be ‘incubating businesses,’ or helping them with small loans, instructing them how to do paperwork, or something-basically holding their hands. Nobody can tell you exactly what they do. I get so disgusted with it. You just keep forking money out and you don’t get anything in return for it, and there doesn’t seem to be any accounting for it. There is between $20 and $40 million in the General Operating Budget that is going to 501(c)(3) organizations. The GOB is supposed to be there to operate the city, putting money where it needs to go-into schools and into neighborhood infrastructure. I’ve been voting ‘no’ on all of this stuff. I can’t do anything but vote no, but I’m getting out-voted on everything because if you can get nonprofit status and sell your idea to this Council, you will get the money. That’s going to keep happening, because there’s a sign hanging above the front steps of City Hall that reads, ‘For a good time dial 254-2000.’”
Open Government, Anyone?
Inquiry into how tax dollars are spent, and how recipients are held accountable, doesn’t offer much assurance that our elected officials are minding the mint, or that they might be amenable to having someone else attempt to mind it. A common response to any questions about specific organizations is, “That item came out of the Mayor’s office,” or “Someone in [the Department of Community Development] can answer that question.” Another reply: “That was an item that the finance committee approved. I’m sure it was for a good reason, I’ll have to go back and look at the information we received.”
Our first request for budget information from Etta Dunning, who heads the Department of Community Development, was met with an astonishing response by her assistant Jackie Hardy. “I don’t understand why you want to see this information,” Hardy informed us. When told that it was our understanding that the information we sought was a matter of public record, Hardy replied, “Be that as it may, I still don’t know what it is you plan to do once you have this information.” For our second visit to that office, Ms. Dunning seemed willing to provide us with any information we required. We were asked at that time to submit an “official request” via e-mail, at which time she would present our request to Ms. Dunning. There is not sufficient cause to suspect that anyone at the Department of Community Development is attempting to conceal any public records, but it is troubling that the employees here, like many others at City Hall we have encountered, convey a proprietary attitude about city business.
More troubling is the fact that access to records, specifically a contract that outlines an organization’s arrangement with the city, seldom provides an understanding of what is being done in exchange for fifty, eighty, or a few hundred thousand dollars. A July 13, 2002, Council resolution to give the Metropolitan Development Board $547,000 states that the money is needed “to increase and improve the economy of Birmingham through the attention of our jobs and industry . . .” If that phrase sounds puzzling, the contract itself is baffling. Councilor Montgomery concurs: “Contracts are very ambiguous. Every time I sit in a finance meeting and every one of these items have ‘submitted by the Mayor’s Office’ on them, it would take a group of lawyers to determine what it is, exactly, the money is for and how it’s being spent. They should go back and pull up the contract and justify what they did. At least that’s what they should do. Operation New Birmingham’s contract is $411,000 every year. Metropolitan Development Board’s is huge, and it’s nothing but replication, and the contracts sure don’t indicate how one [organization] is any different from the other.”
Montgomery isn’t the only Councilor concerned about replication of services. When a representative of the Metropolitan Development Board addressed the Council regarding the MDB’s $547,000 request, Councilor Roderick Royal proceeded to grill the MDB representative about which industries or businesses the organization had developed or obtained within the city limits of Birmingham. Royal also questioned why the city was funding the larger portion of MDB’s total budget, which is $1.6 million. It appeared that someone was about to say no, but the Council voted for the resolution anyway. Then, on September 17, the Entrepreneurial Center came before the Council with a request for $116,750, “to develop, manage, and administer a comprehensive assistance program to meet the needs of small businesses and entrepreneurs in the city . . .” Council President Lee Loder noted, “The investments where private folks will want to invest are not being created. We keep dumping money into programs that are supposed to inspire development.” Councilor Roderick Royal added, “MDB and Entrepreneurial Center should observe a policy seeking to keep businesses within the Birmingham [city] limit. I would like to know the number of graduates from this program who remain in the city. I will support this item, but I would like to see some tracking from last year.”
What any organization seeking funds from the city may infer from these instances is that 15 minutes of scrutiny and mild scolding can earn you a few hundred thousand dollars. Beyond that, it is also problematic that even the severest scrutiny, in the form of an audit by the city’s finance director, might be pointless, because contracts often fail to outline specific performance obligations. For example, one $50,000 contract we examined indicates the recipient’s fiscal obligations in terms of invoices, bookkeeping, description of funds, and expiration dates. Attached to this 14-point document, however, is a single separate sheet with the organization’s mission statement: “to assist citizens in moving toward greater or self-sufficiency.” How the success or failure of this mission may be measured is a mystery. Indeed, we asked some members of the Council how to determine this agency’s success rate, and they could not venture a guess.
It turns out that the organization in question, Ministerial Brotherhood Ministries, Inc., is a “community training skills institute.” A description of services, also attached to their contract with the city, reads, “. . . provides alternative school programs for students who are serving short and long term suspensions from, or who have been expelled from, the public school system.” We sought various opinions about this program that uses tax dollars to “train” students expelled for drug possession, fighting, or truancy. No one we spoke with could tell us how many pupils are enrolled, what they learn, or how successful the program has been in the past. Ministerial Brotherhood may very well be one of the finest organizations operating in the city, but the Council, who agreed to give them $25,000 this year, and who may surrender twice that amount next year, can’t say for certain.
These same elected officials can’t offer specific answers about much larger expenditures, either. No one has provided a satisfactory explanation of what the Civil Rights Institute’s $800,000 contract for “The Civil Rights Project” is all about. We asked a representative at the Institute for some information, and we received a very thorough press release packet about an entirely different program. We called again to explain that we had received the wrong information, but, as of this writing, our calls have not been returned.
We remain equally mystified about the $275,800 granted to the Jazz Hall of Fame for “operational costs.” We wonder about $50,000 given to the Rhino Agency to “promote” the Heritage Festival, especially because Mayor Kincaid’s only assertion about determining the efficacy of this promotion was, “Well, there’s hard data and there’s soft data.”
What Birmingham taxpayers face is a somewhat peculiar dilemma. It’s discouraging enough to learn that one’s elected officials are wasting money; that’s one of this nation’s oldest stories. Yet in an odd way, it is more disconcerting to discover that those leaders might not be wasting tax dollars, only no one knows for sure. The primary side effect of this state of affairs is that it places in question every endeavor or request by any organization that receives money from the city, irrespective of that organization’s history, viability, or reputation in the community. It is also fair to surmise that more resources would be available to worthwhile organizations if funds weren’t siphoned off to so many questionable enterprises.
Another aspect worth considering is the volume of expenditure called into question. Some city officials have attempted to alleviate concern about such spending because the total expenditure constitutes only three or four percent of the entire city budget. That’s actually bad news. If the Mayor’s office and the City Council lack the wherewithal or the willingness to scrutinize these so-called minor sums, where will they find the capability or energy to monitor contracts for hundreds of millions of dollars? They may be required to call on consultants to assist them in that duty. If so, it is the city’s good fortune to already have so many “entrepreneurial assistance” organizations already under contract. &
The following expenditures, shown with excerpts from the resolutions that were voted upon, represent a portion of city spending from May through September of 2002. The majority of these funds were given for one-year contracts.
$275,800 to Alabama Jazz Hall of Fame: for “services to promote and inform the world of Birmingham and Alabama’s immeasurable contribution to Jazz as an art form which includes marketing, advertisement, education, tours, jazz classes for students, and jazz concerts.” (9/17/02)
$116,750 to Entrepreneurial Center: “to develop, manage, and administer a comprehensive assistance program to meet the needs of small business and entrepreneurs in the city . . .” (9/17/02)
$25,000 to Space One Eleven: “to provide cultural services to the city of Birmingham which includes arts education, visual arts programming, and maintaining an exhibition gallery, multipurpose studios, computer lab, photography studio, and ceramics facility . . .” (9/17/02)
$35,238 to Center For Urban Missions: for “Structured after-school programs, weekly study programs for one hundred (100) students, weekly structured art programs, youth training programs, metro camp, and family support network . . .” (9/17/02)
$57,000 to Development Solutions: “to provide technical assistance in developing and implementing a process to facilitate financial assistance and financial packages to aid enterprises operated by business owners in the City of Birmingham . . .” (8/27/02)
$55,000 to The MARC LLC: “for a period not to exceed 120 days to provide services necessary for the development and implementation of the public education campaign ‘Get Alarmed Birmingham’ for the Birmingham Fire and Rescue Service.” (8/13/02)
$800,000 to The Civil Rights Institute: “for a period of one year, to provide a building to house the Human Rights Project which promotes Birmingham’s involvement in the national struggle to gain civil rights for minority citizens and to achieve racial minority participation in the democratic process and the free enterprise system . . .”
$547,000 to Metropolitan Development Board: “to increase and improve the economy of Birmingham through the attention of our jobs and industry . . .” (8/13/02)
$105,000 to TUALAC General Assistance Corp., Inc.: for business incubator, “under direction of Enterprise Community Advisory Board, manage the process of renovating the old Pizitz building” for the purpose of establishing a business incubator for use by start-up businesses. (8/6/02)
$50,000 to Clergy That Care, Inc.: “to provide services in vocational training and employment and to provide education to youth in the city . . .” (a 5 week program at Bryant Chapel AME, at which, according to a spokesman from Mayor’s office they “talk about leadership and African-American culture.”) (7/9/02)
$35,000 to CHAMP: “to provide services to the inner city in the Kingston, Avondale, North Birmingham, Gate City, and East Lake areas, which includes providing positive career opportunities to make them independent and productive citizens by providing summer jobs, college and corporate tours, tutoring, etc.” (7/9/02)
$25,000 to Ministerial Brotherhood: “to provide alternative school programs for students serving short- and long-term suspensions from the public school system, provide special education, counseling, computer education, and a GED program for citizens of the City of Birmingham . . .” (8/13/02)
$150,000 to Birmingham Construction Industry Authority: “to provide comprehensive assistance to and certification of minority and disadvantaged business enterprises in the city of Birmingham . . .” (8/27/02)
$50,000 to Rhino Agency: “to promote and publicize the City of Birmingham in its promotion of the Birmingham Heritage Festival in order to attract visitors to the city, providing significant economic impact . . . and additionally providing a cultural benefit and entertainment to the citizens of and visitors to the City . . .” (7/9/02)
Discovery 2000 Inc., d/b/a McWane Center, $663,000: “for a period of one year, to operate the hands-on science-oriented museum at The McWane Center . . .” (8/13/02)
$188,381 to Police Athletic Teams: “for one year, to provide educational, recreational, and sports experiences to the youth of the City of Birmingham . . .” (8/27/02)
$300,000 to Birmingham Business Resource Center: to “assist prospective and existing businesses with technical assistance and counseling, and to provide access for credit to such businesses . . .” (9/3/02)
$13,000 to BRUTE (Birmingham Racquets Urban Tennis Experience), Inc: to provide recreational tennis opportunities for youth in the City of Birmingham . . .” (9/3/02)
$80,000 to Better Basics, Inc.: to provide services to students from kindergarten through 5th grade, which includes one-on-one tutoring, reading enrichment program, parenting/family reading, and school-wide enrichment . . .” (9/3/02)
$13,214 to Stride Forward Woodlawn: to provide nursing and other supportive services for eligible residents of the Woodlawn community which includes visiting client’s home and performing assessments, monitoring health and social conditions, supervising medication and compliance with health teaching, and providing community education and health screening . . .” (9/3/02)
$50,000 to Titusville Development Corporation, Inc.: “to coordinate and effect a base of volunteer support, to implement a home-based outreach program for disabled and or restricted seniors who are residents of Titusville . . .” (9/3/02)
Also note: $99,200 to Hendon and Hendon Architects, P.C., for consultant and architectural services for the Hawkins Gymnasium Reconstruction Project; $25,000 to Regional Planning Commission to provide evaluation for the Partners for Clean Air Campaign; $100,000 to AIDS of Alabama for social counseling and other services to families affected by HIV; $51,938 to the Birmingham Regional Planning Commission to provide manpower services to the Birmingham Police Department through the Senior Aides Project; $62,500 to Village Creek Human and Environmental Justice Society to address “human justice” issues along 44 miles of Village Creek; $90,000 to the Whitney Museum, and $20,000 to Walters Art Museum for two travelling exhibits purchased by the Birmingham Museum of Art.
Grand total: $4,083,021.00
Not included in this tally are hundreds of thousands of dollars for various contractors, accounting and auditing services, communications and data systems for various city agencies and departments, roofing and paving contracts, dozens of low-income housing projects, architectural consulting fees, health services programs for city employees, and landscaping services.