Sunday, January 22, 2017

Industrial Development Board Nominee

Among the items on the Consent Agenda of the upcoming BMA meeting on Monday, January 23, is the appointment of former alderman Dave Klevan to the Industrial Development Board.  

Here is the item: 

It is the Mayor's responsibility to nominate an IBD Board member. BMA has the responsibility to approve (or disapprove) that nomination. Here is the operative language: 

When there is a vacancy, here is what is supposed to happen: 

The Mayor and the BMA should carefully consider the qualifications of the candidates. The IDB, it is important to note, operates mostly independently of the BMA. It is authorized to issue tax-free revenue bonds for development projects that meet certain criteria.  Revenue bonds, as the name would indicate, are paid from a project's revenue; these bonds are not backed by the full faith and credit of the City. The IDB's independence from the BMA  in issuing bonds is essential to ensuring that the City bears no responsibility for paying the bonds in the event of a shortfall in a project's revenue. 

In a recent article about the Germantown IDB, the Commercial Appeal discusses another aspect of the financing that may be obtained from the IDB--TIF, or tax increment financing:

Germantown seeks to bolster development with TIF  

TIFs can work for the benefit of both the developer and the City, but only if careful attention is given to details, such as ensuring that the City is not saddled with the expenses of maintaining an asset (such as a garage) that could burden the City with  repair costs in the future. It is also important to avoid speculative ventures with developers who may not be able to weather the next financial downturn. The City does not want the IDB-issued revenue bonds to fail, because that could indirectly affect the City's own credit worthiness, or worse, directly affect the ability of the IDB to issue more revenue bonds.  

Given the IDB's need for independence from the BMA, the potential for transparency issues is real. This blog may address any such issues that arise.  Indeed, one might question whether that an upscale community like Germantown even needs an IDB, since the usual focus of an IDB is to boost employment in marginal areas.

Nominations for the current vacancy for the IDB were first discussed in the BMA meeting held December 20. The Mayor stated that the IDB Board had one opening, but that it was not going to be filled at this time. At this point, the November 30 deadline application had already passed for the public to apply for positions on the various commissions and boards, including the IDB. Following the Mayor's statement, Alderman Barzizza, aware that an application had been submitted, recommended that applicant-- Janet Geyer. The discussion concerning the IDB then terminated, with the Mayor saying he would make a decision later. Here is the audio: 

Subsequently, on December 28, Mr. Klevan submitted his application. The timing of his application is interesting, coming as it did almost a full month after the formal deadline for applications for the appointments to boards and commissions. Was the position held open so that Mr. Klevan could apply later? Why did he not  apply during the time frame given the general public?           
Here is Ms. Geyer's application, submitted on 11-17-2016: (click to enlarge) 

In her application, Ms. Geyer's listed as her "special qualifications" the following: 

While working as the Assistant Administrator of Collierville for 3 years, I was the staff liaison for PILOTS, responsible for oversight, compliance and new applications. I also served as the Pension Committee Chair. I also developed, ran and provided metrics for the town's community survey-2 years-reviewed department budgets, prepared annexation budgets, summaries, etc. I am a certified Municipal Finance Officer.

These qualifications, particularly her work with PILOTS (payment in lieu of taxes), appear to make Ms. Geyer particularly well suited for the position.

Here is Mr. Klevan's application, submitted on 12-28-2016:  

In his application, Mr. Klevan listed as his "special qualifications" the following: 
20+ years as a community volunteer

Mr. Klevan, to be fair, obviously completed his application quickly, so I would urge you to check out the website that he posted in support of his candidacy for alderman so that you can see a more complete biography here.  

This is an important position affecting the City's future commercial development. As noted above, due to the need for the issued bonds to be "revenue bonds" (as opposed to backed by the full faith and credit of hte City)  the IDB operates mostly independently of the BMA. The BMA does have responsibility to approve or disapprove the Mayor's nominee. The nomination must not be rubber-stamped, and the BMA should take its advise-and-consent role seriously.  

Sadly, correct procedure has not been followed in this case. It is inappropriate, I submit, for the Mayor to announce a nomination to an important board by merely putting it on the "Consent Agenda" just a few days before the meeting. Generally, items on the Consent Agenda are routine, mundane matters (for instance, the purchase of lawnmowers). The Consent Agenda should not be used for considering important Mayoral nominations. The nomination itself should take place in an open forum, with plenty of time available thereafter for the BMA to consider the qualifications of the person being nominated. 

In this instance, very little notice was given, and this matter's placement on the "Consent Agenda" leaves the distinct impression that the approval was intended to be a mere formality.


1 comment:

  1. Another way to describe the responsibility of the Mayor in this situation: it is his prerogative to nominate his choice.