The quasi governmental slush fund

It used to be illegal to pass tax dollars off to private enterprise and to compete with private enterprise, so a whole breed of new quasi-governmental slush funds were contrived. These were kept off the public books- even though they were using public money.

Citywide Development was one of the first organizations of this type, but then came the Downtown Dayton Partnership and the Dayton Development Coalition. Each with progressively higher salaries for their “executives” – higher than the people who were supposed to be running the city.

Both Ed Armentrout and Maureen Pero who ran the Downtown Dayton Partnership collected more cash and benny’s than the City Manager- who had a much larger budget, staff and responsibility. No worries though, they were going to “save downtown” jobs. The only ones they saved were their own.

Armentrout later got his commensurate when his snake oil routine ran into real journalists in Memphis. Pero moved on to bigger and better paydays at CareSource- home of the $3 million dollar a year CEO (running the new form of quasi-government, the sole source contractor for distributing Federal money).

Better late than never, the Dayton Daily News finally realized that CityWide, with it’s purse filled annually by the citizens of Dayton via their tax dollars, actually should report back on what they do with our money:

The top executive for a development organization launched by the city of Dayton and that does business on the city’s behalf has disclosed his salary after having declined to do so in March.

Steve Budd, president of CityWide Development, said in a July 9 interview his base salary is $138,424, roughly 10 percent of the $1.4 million budgeted in 2009 for CityWide salaries. Dayton City Manager Tim Riordan’s base salary is $145,537.

CityWide, a nonprofit that describes itself as the city’s development arm,

via CityWide president’s salary similar to city manager’s.

And if they are the “economic development arm” – could someone please tell us what Shelly Dickstein does? Do we really need two economic development departments? Especially when you read the following and follow both the money- and the logic:

The nonprofit has been around since the early 1970s. As president, Budd has participated in the city’s most significant development projects in the last decade: RecPlex, Tech Town, the Genesis Project, and the Phoenix Project. Many businesses in the Oregon District have received small business loans from CityWide.

CityWide has received more than $20 million in city contracts

“They develop their own projects, and the city gets behind those it’s interested in,” said Paul Woodie, a retired city administrator who helped create CityWide in the early 1970s to function as an economic development engine within the city’s limits. “The city doesn’t have the people anymore, the resources or mental capacity to do it on their own, (to) get that major third-party partner.”

Apparently- we do have the money- $20 million would have gone a long way to paying for police and fire contracts- but, apparently we don’t have leaders with brains enough – I’ll repeat Paul Woodie for emphasis “The city doesn’t have the people anymore, the resources or mental capacity to do it on their own, (to) get that major third-party partner.”

Could that be sour grapes, since Woodie left city hall without sitting in the captains chair, or just the analysis of the last smart man who left the city while the going was good. Woodie is a smooth political operator- who almost always gives to all viable candidates running- covering both sides just in case.

When you read the list of projects that CityWide has backed- it’s no wonder that CityWide has a great relationship with Premier Health Partners and UD- since the Phoenix and Genesis projects both helped raise property values in their areas. We also need answers if CityWide has to follow the same bid process and requirements that the city has to follow in awarding contracts.

Since CityWide seems to think that they can operate off book, one also wonders if there is any penalty for failure- or is that just another excuse to reach into the public till?

When I first moved into the city in 1986, CityWide had a reputation for doing hatchet jobs on homes in the neighborhood.There was no worse epitaph than saying “it’s a CityWide house.” They were also involved in the projects in Wright Dunbar- where we spent over a million dollars on four homes that were sold for about half that.

If government spent as much time working on delivering top quality government services as they did playing shell games in the name of “economic development” maybe we’d have built a sustainable economic ecosystem instead of a dysfunctional one that depends on corporate welfare and a whole load of bureaucratic overhead that’s main goal is to divert tax dollars into the hands of the friends of the politicians we elect.

Don’t believe it? Start looking at who the major donors to our elected officials have been- the picture should be very clear. That is if the electorate has the “mental capacity” to connect the dots.

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8 Responses

  1. Steve July 19, 2010 / 9:28 am
    I’ve worked with the folks at Citywide and I can say they are great people who really do want to make a positive impact. We can all agree that It’d be great if they didn’t “need” to exist. Whether they should or not is up for debate.

    “The people” decide which area they will live and work in. 1900-1960 or so, they chose Dayton, Springfield, and Xenia. 1960-1990 they chose Kettering, Riverside, and Fairborn.  Today, they’re choosing Beavercreek, Centerville, and Springboro.  Trying to fight what “the people” want is like trying to boil the ocean.

    I don’t know about a regional government, but I’d support forcing any virgin land developers to pay into a “demolition fund” to start drawing down the areas people don’t want to be at anymore. Nothing to be ashamed of, just tear it down.

    Better yet, look at Lexington and establish an “urban service boundary”. I don’t think I’ve ever heard Esrati talk about those.

  2. jstults July 19, 2010 / 2:26 pm
    Steve:

    I can say they are great people who really do want to make a positive impact. We can all agree that It’d be great if they didn’t “need” to exist. Whether they should or not is up for debate.

    The biggest problem is the lack of accountability, secrecy and plausible deniability that this sort of governance brings.  Is there a problem with the way your pseudo-gov contractor hands out the federal bucks (off which the city gets to skim an administrative fee btw), or the way they secretly relocated vagrants who are bothering well-connected businesses into an unsupervised group home in a less trendy part of town?  Simple solution for the city: just throw them under the bus when anyone comes around asking questions.  Pseudo-gov can then just change names, wash, rinse and repeat.  No one is held accountable.  Everyone profits except the neighborhoods and disadvantaged citizens who are used to keep the money spigot open.
     
    This highlights another principle-agent problem.  There is a stronger incentive for the civil servant to keep the federal funds flowing (the admin fee helps cover a bit of their own payroll costs), than there is to serve the interests of the city and its neighborhoods. Policies that concentrate poverty further than it already is have been shown to be detrimental to the health of neighborhoods, but those are exactly the policies that make for the easiest pay-day for all the government and pseudo-government decision makers involved.  So guess what sort of “solutions” we get, good intentions and all, from those folks?  Amazing, the avarice and naked self-interest that can be sublimated by good intentions.

  3. Civil Servants Are People, Too July 20, 2010 / 12:45 am
    Here’s what keeps politicians and newspapers in business:
    Step 1: Government is wasteful.  Let the private sector do it.
    Step 2: The private sector is wasteful.  Let the public sector do it.
    … and repeat.
     
    By the way, these numbers were easy to find, and look impressive:
    http://www.citywidedev.com/pdf/2008AnnualReport.pdf
    Does the DDN just not Google anything?
     
     
  4. Teri Lussier July 20, 2010 / 7:45 am
    >Amazing, the avarice and naked self-interest that can be sublimated by good intentions.
     
    ‘L’enfer est plein de bonnes volontés ou désirs’
     
     
  5. bobby July 20, 2010 / 11:37 pm
    The second building at Tech Town will be built by Shook- Raymond Jackson enterprises LLC. The cost of the 65,000 square foot building per square foot is $138.46  (Nine million).  It is my understandng that RG Properties is building a new Terra Data Headquarters for 1/2 this cost. RG had bidders in the teens and Citywide “negotiated” their deal.  How can Tech Town compete with Austin Road when there is this kind of disparity? How many loans at Citywide are performing? How many are non performing? Just asking.
  6. Civil Servants Are People, Too. July 21, 2010 / 2:30 am
    From DDN:  “RG Properties of Washington Twp. Plans to begin construction in November on a 120,000 square foot four-story office building …..The building will cost approximately $15 million”
    http://www.daytondailynews.com/business/first-developer-commits-to-office-retail-space-at-austin-pike-299880.html
    That’s $125 per square foot on a building nearly double in size.    The difference in cost is easily explained by the economy of scale.   Clearly, Bobby’s “understanding” was incorrect.    Perhaps just another example of people looking for an excuse to knock somebody down a peg?
     
    However, only one of the two projects is doing anything to support local sub-contractors.  Guess which one.
     

     
     

  7. bobby July 25, 2010 / 1:01 pm
    CSAPT,  The September 2009 DDN article you referenced was a press release with projected costs for a building at Austin Road. It is still my understanding that the bids for this building were significantly less than projected . Deteriorating economic conditions have created a buyer’s market for construction services. The only beneficiaries of a buyers market at Tech Town will be the general contractor/project manager. The earlier post was not to knock,  but point out the efficiencies of competive bidding in the private sector  vs. quasi governmental agencies” negotiating” during a buyer’s market using taxpayer dollars.  One can rest assured that if the leadership at Citywide had to personally sign notes to build this building,  the building would have gone out for bid.

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