Chattarati Articles in Government & Politics

Planning Across Boundaries

2011-10-27T08:00:00Z

When we think about public planning, we tend to think on a small scale: the zoning of a neighborhood, road construction or a citywide sewer system. These planning functions are essential to building a livable community, but they're mostly limited to a local area within a single jurisdiction.

Armando Carbonell thinks about planning on a much larger scale. He thinks in terms of megaregions — large, interconnected areas of urban cities and natural systems that cross county lines and, often, state boundaries.

Carbonell is the chairman of the department of planning and urban form at the Lincoln Institute of Land Policy in Cambridge, Mass., where he's worked on national, regional and urban planning policies since 1999. He's also a co-chair with America 2050, a national initiative to prepare for population growth over the next four decades.

On Nov. 1, Carbonell will be in Chattanooga as the second speaker in the George T. Hunter Lecture Series. Earlier this week, he and I spoke by phone about the concept of megaregions, some basic goals for strategic growth plans, and the challenges cities will face in the future.

Q: In the forward to Megapolitan America, you write about the origin of the megaregion. Population growth is a common theme in many planning discussions, but in 2004, you started looking at clustering population growth — that is, trends around specific geographic areas. Is that a fair way to describe it?

A: The first thing we did that was unusual was we picked the year 2050, and that's a lot further out than people tend to look, although the census bureau does have projections out that far. But to get into the cluster thing, we took more specific data for counties. This was at the University of Pennsylvania. We had them buy the Woods & Poole data and projections. We sort of extended that out to 2050, so we would have a sense of where the relative growth and shrinkage was going to be in the country.

I think you get a picture out of that that shows that some parts of the country are going to grow a lot more. Some are probably going to continue to lose population. That has implications for urban form, cities, the environment, and how we use land. We used that as a starting point.

Q: How do you define the megaregion?

A: It's a relatively new way of thinking about regions and space. I see it as including metropolitan areas, the regions around cities, in particular looking at the linkages among metropolitan areas — so that you get more than one city or metro, you get bunches of them — but within some natural context. The map of megaregions that I would use is a bit fuzzy, but they include cities, they include metropolitan areas, and they include large natural systems. What we try to do is not separate the urban function from the natural function. We try to see how they relate to each other.

To pick the one that's closest to home for me, a classic megaregion is the whole northeast of the United States. That stretches from the Appalachians to the Atlantic Ocean. It includes all the big cities of the eastern seaboard and all the spaces in between.

Q: When you start to look at planning in this larger context — it goes across different boundaries in terms of cities, counties and states — what kind of new planning policies stand out as priorities that may not have been as obvious on a more traditional scale?

A: The most obvious has to do with what we call governance, as a part from government. Governance is how we make decisions across various boundaries. It's the way most regional planners now like to think about the whole policy process. So for example in a multi-state megaregion, the first issue is that each state has a lot of control over land-use policy and, to a large extent, over transportation policy. These are two big drivers of development patterns and infrastructure. There is really no easy way to get states to work together across those boundaries that exist today.

We've been interested in the inner-city rail system and especially high-speed rail. Any time a rail line is going to pass through many states, many governors have something to say about it, but also many states' departments of transportation. There's opportunity for things to get uncoordinated. What one needs to think about are the methods by which people get together and work out their needs, that may be different in different states, in some compatible way that leads to a system that works. There's sort of a built-in challenge to anything at that scale that's essentially jurisdictional.

There is no entity that has authority over a megaregion, and we're not proposing that there should be. It's not like a super state. It's a way of thinking across those boundaries about the things that need to be considered at that scale. And there are a few things that just seem obvious, like large transportation systems, large water systems, large energy systems that need to be thought about. Really the insight is that to plan effectively for certain needs, we need to get better at working across boundaries. I'd say that's one of the specialties we've developed at the Lincoln Institute, is how to do that.

Q: When you're working on projects that go across boundaries, like transportation or water quality, do they have to happen at a federal level? Or is there a way that cities can coordinate these policies in an effective way?

A: I think it goes in both directions. When we started thinking about this, we had an ambitious goal to think about national-scale plans. [But we] quickly stepped back from that and said, "That's not really tenable."

I think we learned something the more we looked at the situation: that the country's not homogeneous. Megaregions probably represent the biggest scale that you could think about getting real consensus around in terms of real planning. So we started with a more bottom-up process where megaregions really need to get together and think about their needs and present those to the national government. But we really don't see the national government telling megaregions what to do or creating the national directive to do this.

On the other hand, what we did see happening was that national government has the ability to spend money, or at least it used to. That is a great incentive for people to get together and do things. At different scales, we've seen this recently. The regional sustainability grants that have come out of HUD have brought together people who otherwise weren't getting together to plan — in some cases across state lines. And that's something we encourage them to consider: to think as big as possible in terms of federal inducements to large-scale regional planning. I think that can be a very positive role. And in the stimulus package, there was funding for high-speed rail development that made a big difference in terms of stimulating interest across state lines.

I'm not saying there is no federal role, but we generally would say that the most effective planning should come from the regions. There should be some consideration of national consequences and implications, and there's certainly still great importance to national policy. But especially in difficult times like this, you can imagine more happening at the regional level than will happen at the national level.

Q: Right now, we're in the process of putting together a large strategic growth plan that includes 16 counties across three different states. This kind of initiative has been done in other parts of the country. Your book, Regional Planning in America, highlights a few. In terms of doing that scale of planning, what are some basic goals that stakeholders, government and citizens should hope to get out of the process?

A: The very first thing is getting people to believe that they actually have some influence on the future, and that the thought of planning for a long time is even feasible. I think you have to break down a kind of resistance to the thought that the future is out of our hands — that citizens don't have much to say about it or that planners don't have much to say about it.

That's the difficulty in any one of these initiatives, because there is a kind of fatalism and even a kind of negativism that sometimes creeps in — a sense that things are not going to be as good as they were in the past. I think it's important, because there's no reason to believe that's true, to put that aside and give people a sense of the potential to have a positive effect on the future and to actually do things that will make life better in places, which is the overall goal that planners have.

Some of that has to do with what I'd call visualization. This amounts to showing the possible outcomes of different choices that people can make, often called scenarios, and helping them to see the better and the worse possibilities and the pathways that might lead to the better ones. This has to be conditioned by an understanding that we're operating in an uncertain environment. There are a lot of ways of describing scenario planning, but one of them includes a sense that you can't just pick the scenario you want. You really need to be prepared for different things to happen and consider what the most robust choices are that you can make — to open you up to the best opportunities, but also protect you from some of the worst things that could happen. It's a little bit like hedging your bets.

I think the most sophisticated versions of this kind of long-range, large-scale planning include not just, "let's just pick our favorite scenario and hope we can make it happen." Which, you know, there's some value in that actually. But I think even more valuable is to say, "What happens if energy prices go through the roof? What happens if the housing market stays down?" Consider some of the good or the bad things that might happen, and consider how different paths will fare if those things happen. Then say, "Hmm, maybe I might want to guard against that in some way."

We've done some work on planning for climate change. One of the real challenges there is that nobody can say exactly how much or how quickly climate will change; we're seeing effects of different sorts around the country. Helping people to think about how they can make the best choices — it's not the right choice, because no one knows what that is — in terms of having the fewest regrets in the future with the path that they take. This really is a recognition that communities have different preferences for risk and assess things in different ways. You can't really dictate a kind of mechanical solution to this. It's not strictly a science and engineering problem. It's a social activity to decide how to manage risk and how to think about some of the challenges in the future. Once communities can develop a vocabulary to talk about it, they can do great things in terms of getting people together to address things which otherwise might be scary or that you might just want to ignore.

Q: There's been a resurgence of interest in cities over the last couple decades. Alex Krieger was here recently, and he talked about how Americans are moving back to cities. I want to ask about their role in these bigger systems, specifically the kind of challenges cities will face in the future.

A: I don't know if we want to call it the Seinfeld phenomenon, but it seems that the popular cultural idea of cities — the stock has gone up tremendously.

I think there is a resurgence. I think there are demographic factors that will continue to feed that. I'm a classic baby boomer, and I walk to work. I went to a lot of trouble to live close enough to my office to do that. And I know lots of people who are like me, and there's going to be bunches more. That's one demographic feed going into cities. It's a lifestyle choice, and it makes sense for us.

But there are also a lot of young people who have really been attracted to cities, in certain cities more than others. New York has just had this tremendous boom in young people coming in, rediscovering neighborhoods, and creating real estate value. And that affects one of the challenges: Desirable cities are very expensive places to live. That starts to limit their accessibility to people with ordinary means, and they really need to be accessible to lots of people. Housing is going to be a challenge in cities. Even cities like New York, which are thought of as pretty dense places, are thinking about how to increase intensity of use in places that are less so.

So finding space for people as cities continue to be popular is a challenge. And making housing affordable is a big challenge.

There's also this differential [in that] some cities are growing, but some cities are still shrinking. The statistics out of the last census suggest that the Detroits and the Clevelands and others actually had done worse in between the two censuses than they thought.

The places that haven't grown so much — and generally what is going on now is an acceptance that some of these places are not just going to grow back to their highest population numbers — need to think about an opportunity to reconfigure themselves around smaller population and think about how to better use the space of the city.

In Cleveland for example, things related to urban agriculture are going on in a pretty significant way. [They're] dealing with empty lots and thinking about how to consolidate development as much as possible. I think there's a new realism in some of the cities that have yet to completely stabilize that they'd be better off, in a sense, accepting the smaller population, trying to rework the infrastructure that they have, and think creatively about more green space and about more compact neighborhoods and encourage people to move into more logical clusters where they can do that.

People are working at this in serious and creative ways. I think it's a new attitude, and it's the realistic approach.

Another major challenge is climate change, which I think is the biggest challenge. It's going to require us to rethink how we do a lot of things. Some places are going to be better prepared than others that haven't taken it into account. I think this will be an inescapable phenomenon, and one that we've encouraged people to think about sooner and not later.

Q: Could you give us a preview of what to expect in your lecture next week?

A: Well, I don't want to give it away too much, but I have been thinking about it. It'll be a kind of excursion through a number of scales, so be prepared to get a little dizzy as I zoom up to the level of the planet and then down to something fairly microscopic. That's kind of one of my themes. It may help as you embark on a regional initiative to think about how to think big and think small in a way that's connected. I'll also try to carry through my main idea, which has to do with the integration of cities and urbanism with natural systems. And I might end up on some suggestions on some pathways to a good life, which I think is not too much to ask that planners help us to build a good life for ourselves.

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Littlefield Calls for Consolidation Timetable

2011-07-28T15:00:00Z

The governments of Chattanooga and Hamilton County should merge, end double taxation for city residents, and improve public services for all residents, Mayor Ron Littlefield writes in a lengthy white paper released today. And he thinks 12 months should do the trick.

In his report, the Chattanooga mayor calls for a year-long timetable to either put a metro referendum in front of voters or have the county adopt a home rule charter. He says the consolidation of the two governments would better serve municipalities that fund their own urban services, as well as the unincorporated territories where increased urbanization is being supplemented by the county's general fund.

"Hamilton County attempts to operate somewhat as a municipality and uses general revenue to support or supplement services outside Chattanooga, such as volunteer fire departments or other public service providers," Littlefield writes of the county's taxation of city residents. "... the combined effect is that some county services are depending on the city for almost 85 percent of their support. This isn’t fair."

To counter this trend, he's proposing two options: citizens and community stakeholders can form a commission to draft a new metro charter, or the county can adopt home rule.

The report was released during a forum this afternoon, where he kicked off a public conversation on these issues. Reportedly, Hamilton County Mayor Jim Coppinger did not attend. He told the Times Free Press on Tuesday he found it "odd and unusual" that the city mayor was leading a discussion on home rule for the county. "That's an issue for county government and the Board of Commissioners," he said.

Tension between the two mayors, and their respective governments, came to a head over the dissolution of a 45-year sales tax agreement. That agreement ended in June and resulted in around $10 million in tax revenues that historically went to the county reverting back to the city.

In his report, Littlefield lays out a litany of arguments and counter-arguments that have long dominated the consolidation debate. Hamilton County residents have voted down three metro referendums over the past 47 years. The first was in 1964, followed by subsequent pushes in 1970 and 1984.

Passing a metro charter is tough to do in Tennessee. Only three counties have adopted consolidated government — Nashville-Davidson County in 1963, Lynchburg-Moore County in 1988, and Hartsville-Trousdale County in 2001 — since it was added to the state constitution in 1955.

Support for metro in Hamilton County has always been a mixed bag. Both city and county residents rejected it the first time around, but by the second and third referendums, city residents voted in favor of consolidation; county residents did not. A 2006 poll from the Community Research Council (PDF) found that while 42 percent of registered voters support it, a majority of non-city residents remain opposed. In a referendum, a metro charter would need concurrent majorities from both city and non-city residents, state law says.

Since the '84 referendum, much has changed in Chattanooga and Hamilton County. The city of Chattanooga reorganized its government in 1990 to the current mayor-council system. Two separate school systems were consolidated into the Hamilton County Department of Education in 1997. Recent economic development — Littlefield cites the redevelopment of downtown Chattanooga and the arrival of Volkswagen in his report — has created an imperative to bring the two governments together, he says.

In addition to drafting a metro charter, which is the central theme in much of his report, Littlefield also proposes an alternative approach: Hamilton County could seek its own home-rule charter. That move would give county government ordinance power — the ability to offer urban-level services without first having to get approval from the General Assembly.

It would enable Hamilton County "to operate in a more urban, municipal-like fashion," he writes. "If Hamilton County took the necessary steps to draft and adopt a charter containing the right provisions and powers, it might then be possible for Chattanooga or any of the other municipalities within Hamilton County to hold a referendum on the question of merging with or otherwise joining the new urban government."

"I for one would commit to support the initiative and cheer the process along," he writes.

The mayor concludes by saying that the time for consolidation is now while private development is in a rebuilding phase and a 40-year growth plan is being put together for the 16-county region surrounding Chattanooga and Hamilton County.

"Let it be said flatly and absolutely that at this point in time there is nothing more important in determining our community’s future than the need to achieve greater unity," he writes. "The time for unifying our governments is now. We must not allow this opportunity to slip away."

Read Mayor Littlefield's full white paper.

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Proposal: City of Chattanooga’s Capital Budget for Fiscal 2012

2011-07-21T16:20:35Z

The city of Chattanooga began its capital budgeting process earlier this year with the preparation of documents by city departments and agencies. Download and review the results of that process, the administration's proposed capital budget for the fiscal year, at Chattanooga.gov.

Via chattanooga.gov

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‘Chamber’ Affiliates, Namesake Take Cover

2011-07-21T09:30:00Z

With the cloud over the Tennessee Multicultural Chamber of Commerce growing, local organizations are distancing themselves from the firestorm.

In a press conference Wednesday, the president of the Chattanooga Community Development Financial Institution (CCDFI) said an FBI investigation into its $574,000 loan to the Multicultural Chamber is focused only on the troubled organization, not his own, the Times Free Press reports.

[David Johnson] said the FBI asked about Multicultural Chamber Executive Director Sherrie Gilchrist's involvement at a September board meeting where the loan was approved. Gilchrist serves on the CCDFI board.
"They asked about her presence," he said.
He said the meeting's minutes reflect that she recused herself from the vote and left the meeting. The minutes also state that she made comments but not what those comments were.

Nooga.com:

“We are not the story,” Johnson said, after he explained how the FBI contacted him about the loans his organization made to the Multicultural Chamber.
“I asked two questions,” he said. “I asked, 'Is the CCDFI the target of an FBI investigation?' and “Is the CCDFI the subject of an FBI investigation?”
Johnson said the federal agency assured him the CCDFI is not being investigated. To questions about an investigation of the multicultural chamber, Johnson said he only asked about his agency. Ed Galloway, with the Chattanooga FBI office, said he could not comment on whether the Multicultural Chamber is under investigation.

WDEF:

Johnson says, "The board of directors of the CCDFI, at the time this loan was made, felt that this was the perfect type of loan for a community development financial institution and they acted in good faith in approving that loan."
Two loans were given totaling $574,000. $500,000 was to be used to purchase property, $30,000 used to demolish a building that was on it, and $44,000 used to pay interest.

And in a letter to members on Wednesday, Tom Edd Wilson, president of the Chattanooga Area Chamber of Commerce, clarified that "the Chamber" is not the same thing as the "Multicultural Chamber" and that the two organizations are not affiliated:

I am writing to make sure you are aware that the Tennessee Multicultural Chamber of Commerce is a completely separate organization. This clarification becomes necessary in light of recent media stories and headlines referring to "the Chamber." In at least one case, a media outlet mistakenly used our logo in a story about the Tennessee Multicultural Chamber, and the fact that we have recently established the International Business Council has apparently also been a source of confusion.

Although both organizations use the "chamber of commerce" designation, the Chattanooga Area Chamber of Commerce and Tennessee Multicultural Chamber of Commerce do not have any affiliation. Each organization has its own separate articles of incorporation, board of directors, staff, and financial management system.

Updated July 22 at 12:15 p.m. | Add Blue Cross Blue Shield to the list of organizations pulling away from the Multicultural Chamber. From the Times Free Press this morning:

A major corporate donor to the Tennessee Multicultural Chamber of Commerce said Thursday it would pull funding temporarily to the chamber, which faces two federal investigations and questions about its financial dealings.
Mary Danielson, spokeswoman for BlueCross BlueShield of Tennessee, said the company is committed to diversity and empowerment as advocated by the chamber.
“However, we are temporarily suspending our funding of the [Multicultural] Chamber pending the outcome of the investigations into its finances and operations,” she said.

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Feds Probe Multicultural Chamber Loan; Board Member Jumps Ship

2011-07-20T10:45:00Z

As the Tennessee Multicultural Chamber of Commerce comes under increased pressure to explain financial discrepancies raised in a recent memo from the city auditor, the Times Free Press reports the FBI is now investigating a loan the organization received from the Chattanooga Community Development Financial Institution.

David Johnson, president of Chattanooga Neighborhood Enterprise and the Chattanooga Community Development Financial Institution, confirmed he had received a call Tuesday morning from the FBI about a $579,000 loan made to the Chamber in October 2009 by the Community Development Financial Institution.
"They seemed to be more interested in the chamber than the CCDFI," Johnson said Tuesday. "A lot of their questions were concerns about the loan process."

The same day, a Volkswagen executive gave the newspaper a copy of his letter of resignation from the Multicultural Chamber's board of directors. In it, Thomas J. Loafman says he advised the board that upon learning of the allegations surrounding the organization, "an investigation should have been immediately requested," and that executive director Sherrie Gilchrist "should have been put on at least a temporary suspension of duties until the results of the audit and investigation are concluded."

The board decided against those (and other) steps, a move that "further jeopardizes the future viability of this needed and valued organization," Loafman writes. "Therefore, I do not feel I can bring further value to the [Multicultural Chamber board] and thereby submit my resignation."

Tuesday afternoon, Gilchrist and board members submitted answers to the Chattanooga City Council on 18 questions raised in city auditor Stan Sewell's initial report. But according to Councilman Jack Benson, their answers were incomplete.

"We've received 18 answers, but we haven't received 18 complete answers," he said. "If you read that, many of those interrogatives that we asked for were just partially answered. They need more time to answer that completely, and we need more time to review what they've said in their answers."

Gilchrist and former Councilman John Taylor addressed the council Tuesday evening and provided additional information about its financial records.

"There's been a lot of discussion about whether or not property was acquired at a certain rate or below market value. We have appraisals here tonight that we can provide you," Gilchrist said. She added that partners on the Business Solutions Center project fell through due to lines of credit drying up during the recession.

"There's been no misrepresentation of any money related to the government, our stakeholders, that have been given to us," she said. "If you have additional comments we'd be glad to address them."

The City Council didn't carve out any funding for the Multicultural Chamber in its recent budget, but all nine members supported an ordinance that wasn't on the agenda to reserve $75,000 from the city's economic development fund to support minority-owned businesses.

The mission of the Multicultural Chamber, to assist minority-owned businesses, has been admirable, Benson said. "My problem is, has it been cost effective what they've done?"

The motion to set aside funds for minority-owned businesses gives the council enough time to see if the beleaguered organization can fulfill its mission "in a good, accountable way," Benson said. "And possibly, they might get the $75,000, but from what I've read so far, it looks to me like we need to make a clean sweep."

Audio

Chattanooga City Council meeting for July 19. from City of Chattanooga Download Chattanooga City Council meeting for July 19.

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With New Superintendent, Budget Talks Begin Again

2011-07-15T10:00:00Z

The Hamilton County Department of Education anticipates an additional 500 students to enter the public school system next month, and it faces a $17.8 million budget deficit for the fiscal year that began July 1. Add to that a state-mandated 1.6 percent pay increase for all teachers, and a number of tough choices loom overhead.

But they boil down to one central theme: increased operational costs with a finite amount of money to meet them.

The Hamilton County Commission previously capped the education budget at $316 million. Unless it opens up new revenue sources, school officials will have to make some unpopular decisions in the days ahead.

By and large, budget discussions have been overshadowed the last two months with the upheaval in central office. On Thursday the new superintendent, Rick Smith, met with school board members for a budget work session, and he proposed several potential solutions for their consideration.

Nooga.com:

The budget came with it’s fair share of cuts. Among them was the elimination of nine and a half teaching positions, spread throughout the system. It also recommended an increase of 45 school based positions. That number could rise, depending on the amount of students who show up to school on August 3.
“Based on last year’s growth, we anticipate that we may go above an increase of 500 more students this year,” Smith said. “Those 45 positions you heard about tonight are with the anticipation of those 500 students. If we get more than that, we may have to go above it.”
The proposed reduction in funding that generated the most discussion was a proposal to eliminate more than $490,000 in medical benefits for contract school bus drivers.

The school board is expected to vote next week on the budget, according to Chattanoogan.com. The proposal on the table now involves cutting into the school system's rainy day fund to offset salary increases for teachers.

The County School Board next Thursday is expected to approved "an incredibly tight" $316 million budget by cutting into the rainy day fund.
New Supt. Rick Smith said he has been in talks with County Mayor Jim Coppinger and some County Commission members on the need eventually for "additional revenue."
The budget as presented at a work session on Thursday afternoon called for using almost $1 million of fund balance. Board members said they did not want to cut medical benefits for contract school bus drivers, which means drawing down another $490,000 from the fund balance.

And, in an ironic twist, if more students enter the school system than expected, officials may end up going back to the commission to request additional PILOT funds, the Times Free Press reports.

[Board Chairman Mike Evatt] said he plans to ask commissioners — who control the school system’s money — to release special education funds paid to the county. The paymtent-in-lieu-of-taxes funds, known as PILOTs, already amount to between $3 million and $4 million and could keep schools from overcrowding and understaffing, he said, which is likely if the student population jumps more than the 500 students expected next year.
“We are to the point where I feel like, if we are asked to cut at this level, we will need additional revenue,” newly hired Superintendent Rick Smith told the board Thursday night at a work session to discuss the budget. “We are growing. It makes me nervous .... The scary thing will be if a 1,000 [more] kids show up.”

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Conflict of Interest for Multicultural Chamber Director

2011-07-15T07:45:00Z

Sherrie Gilchrist, executive director of the Multicultural Chamber of Commerce, was on the board of the Chattanooga Community Development Financial Institution when it lent the Multicultural Chamber $579,000 to purchase land, the Times Free Press reports today.

Via timesfreepress.com

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Updates on the Multicultural Chamber

2011-07-14T09:30:00Z

On Tuesday, city auditor Stan Sewell released a critical memo outlining an array of financial problems at the Tennessee Multicultural Chamber of Commerce. In the recent past, the nonprofit organization received public dollars from city, county and federal sources. Local funds were cut off after the Times Free Press brought to light discrepancies in how they were being managed.

Today, the Times Free Press led with a story that digs deeper into how the Multicultural Chamber used grant monies from the Department of Housing and Urban Development and the Chattanooga Community Development Financial Institution, $700,000 in all, to acquire properties for its future offices and a Business Solutions Center for members.

The Tennessee Multicultural Chamber of Commerce purchased five parcels of land on East M.L. King Boulevard through loans and federal grants to build a business center that never materialized, records show.
The Chamber paid $700,000 for the properties, with more than two-thirds of the money coming from a grant through the Chattanooga Community Development Financial Institution Inc., a nonprofit organization set up to make loans to small businesses in urban neighborhoods.

And, as the newspaper notes, the auditor's report indicates that two of the parcels are appraised for significantly less than they were purchased for:

The Community Development Foundation Institution loaned $579,169 to the Multicultural Chamber in 2008 for the acquisitions, a city review states. The review, by City Auditor Stan Sewell, says $500,000 was paid for the two parcels, whose total assessed value was $211,000. It is unclear how the rest of the $79,169 was spent.

Read Sewell's memo.

Newschannel 9 wants to know where the money is:

We went to the Multicutural Chamber Wednesday looking for their side to this developing story. Inside a large suite with numerous offices on the second floor at 535 Chestnut Street we found one woman, Marvis McKeldon, and asked her to see CEO Sherrie Gilchrest because our calls were not returned.
"No, she's on her way to a meeting now," McKeldon said. When we asked if Gilchrest got our message McKeldon replied "I gave it to her."
Despite the size of the office the Multicultural Chamber told city officials earlier this year they only have two employees. But tax records show they have four employees.
That's only the beginning of a long list of discrepancies listed in the audit.
In the summation of his report Sewell said the Multicutural Chamber "made extravagant expenditures and obligated the organization to excessive liabilities at a time when liquid assets were virtually non-existent and operating losses were being consistently incurred."
"I was really shocked, how blantant some of the things, I thought surely it can't be true," City Councilman Manny Rico said.

WRCB notes that the City Council passed a budget amendment on Tuesday that leaves out the Multicultural Chamber. The ordinance passed 7-2 — council members Russell Gilbert and Deborah Scott voted against — and finalized the city's agency appropriations for the fiscal year that began July 1.

Supporters of the Multicultural Chamber pleaded with the City Council before the vote to restore $75,000 in funding for the organization. Nooga.com reports:

Former City Council members Yusuf Hakeem and John Taylor, and businessmen Gerald Mason and Jerry Hanner, implored the council to fund the agency, saying it is still needed to help promote existing minority-owned businesses and provide training for people wanting to become their own boss.
"It's sad that this chamber is more recognized outside of Chattanooga than it is here," Mason, retired owner of Kandy Kastle day care centers, said. "This chamber has given life to many people. I was once on the board, I'm not saying it doesn't have problems. I don't know, I've not had that close communication ... but this organization needs to be continued to be funded."
Council members said they support the concept of the chamber but a report by the city's internal auditor, completed Tuesday, raised questions.

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Multicultural Chamber Made ‘Extravagant Expenditures,’ Auditor Says

2011-07-12T19:00:00Z

Updated July 13 at 10 a.m.

The Tennessee Multicultural Chamber of Commerce spent lavish sums of money on personnel and travel, incurred significant debt and has few assets to show for it, and may have misspent federal funds, a new report from city auditor Stan Sewell shows.

In the recent past, the Multicultural Chamber received hundreds of thousands of dollars in public support from the city of Chattanooga and Hamilton County. Those funds were recently cut off after the Times Free Press brought to light new details about how the organization mismanaged its finances.

The Multicultural Chamber's director and board “made extravagant expenditures and obligated the organization to excessive liabilities at a time when liquid assets were virtually nonexistent and operating losses were being consistently incurred,” Sewell concludes in a critical review of the organization’s financial records from 2007 to 2010. “Even with continued funding from the county and city, the organization’s ability to continue as a going concern should be questioned.”

The memo from the city auditor, released Tuesday, confirms some of the discrepancies raised by the newspaper, and it sheds light on other questionable areas too. Among its findings:

Sherrie Gilchrist, the Multicultural Chamber’s director, earned more than $130,000 annually between 2008 and 2010. Her compensation was substantially higher than the heads of two comparable organizations — Big Brothers Big Sisters of Chattanooga and Partnership for Families, Children and Adults.

The organization’s travel expenses averaged $27,000 per year, though it only budgeted $1,200 per year for travel. “Budget submissions to the city seem to consistently differ from actual expenditures,” the memo notes.

Increasing debt funded consecutive and persistent operational losses. In 2005, the Multicultural Chamber's assets totaled $39,000 with liabilities of more than $87,000. Four years later, the organization had $17,700 in assets and liabilities of $150,800. And, during the review period, it had taken on a debt of $579,000 to acquire properties worth $211,800, according to the auditor's review of tax records.

The Multicultural Chamber may have misspent part of a $545,000 grant from the Department of Housing and Urban Development. It received and spent $306,000 intended to support the construction of a multi-million dollar Business Solutions Center for its members. As a condition of the HUD grant, the organization was to provide $3.6 million in cash and $300,000 in in-kind support to the project.

As of June 2009, the Multicultural Chamber had not spent any money on the project other than the HUD funds. The project was supposed to be completed by June 2009. To date, “the organization has not yet broken ground on the project,” the memo says. "A physical inspection of the land shows no signs of project activity." Audited financial statements indicate the organization has now billed and received the remaining $238,600 of the HUD grant. The land purchased with the federal grant for $200,000 has a current appraised value of $78,000.

"There is a sufficient amount of information to raise concern that [the Multicultural Chamber] has not met, and will not meet, the grant terms," the memo says. "A demand for repayment by HUD would result in an instant liability of $545,000."

The report was released late Tuesday before the Chattanooga City Council finalized its appropriations to supported agencies. There was no funding set aside for the Multicultural Chamber in this year's city budget. However, three council members — Peter Murphy, Andraé McGary and Russell Gilbert — unsuccessfully tried to reserve $75,000 for its future use on the condition that its leadership answer 18 questions raised in the auditor's report. That motion failed. According to previous reports, Hamilton County will not provide funding to the organization either.

Supporters of the Multicultural Chamber pleaded with the council to restore funding on Tuesday evening, the Times Free Press reported this morning:

But a Chamber board member and former city councilman questioned the 21-page review to Mayor Ron Littlefield on Tuesday night, saying Sewell never talked to the executive director of the organization, Sherrie Gilchrist, or to board members.
“It was a document taken without her opinion,” said John Taylor. “She can answer every question.”
... Gilchrist did not attend the council meeting.
Taylor said afterward the Chamber’s board of directors also will go to the Hamilton County Commission on Thursday to ask for restoration of funding.
He said the Chamber would not comment on the auditor’s review until it meets with the council and commission to give them answers to the questions raised by Sewell.

Read Sewell's memo

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City Hall Releases Agency Appropriations, Capital Budget

2011-07-12T15:00:00Z

Coming back from a holiday, Chattanooga City Council members are expected to vote on roughly $20 million in appropriations to city-supported agencies later this evening. The ordinance for agency funding (PDF) would amend the $201 million operational budget passed by the council two weeks ago. The amendment would not add to the budget's total amount, but it decides how much money each agency receives from city government.

This afternoon, the Littlefield administration proposed a $57.8 million capital budget for the fiscal year ending June 2012. By comparison, the council approved a $54.8 million budget last year. The capital budget sets funding levels for infrastructure projects over a five-year period. Here's a copy of the presentation:

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