Wednesday, February 23, 2011

Incestuous Politics Costing You Millions

A recent article in the Star News, "Cape Fear Future - Advocates' visions differ on area's direction", paints a very good bird's eye view of one of the many so-called "economic development" organizations that local taxpayers fund every year here in New Hanover County and the City of Wilmington. However, the article falls short in digging into the issue very deep.

Connecting the dots from our political establishment to these groups means following the money - and that can be a difficult task. It also means understanding who the key players are, and what their roles are in the community. Once these things have been established, it is hard to come to any conclusion other than the fact that we have an incestuous iron-clad political/business/media machinery in operation that dictates virtually everything about our lives, economy, and information we receive here in Southeastern North Carolina.

As has been reported right here on The Wilmington Watcher, Cape Fear Future (CFF) is a function of the Wilmington Chamber of Commerce; based on a consultant's direction - for a price of $250,000. The idea of the organization is to "further develop the Cape Fear region’s Knowledge Sector Economy to promote economic development and ensure the future prosperity of the region" according to the Chamber's website. The idea is that creative and knowledge sector jobs are what will save us all. Part of that recipe is to attract a larger gay community, according to Dr. Richard Florida, the highly paid consultant behind the creation of Cape Fear Future. Nothing against the gay community - but do we want our government using our money and resources to actively pursue such a thing? Is this an appropriate function of government?

It is important to look a little deeper in this issue in order to understand what is going on. Cape Fear Future has positioned itself as the new kid on the block; the younger, hipper economic development agency; the elite group of chosen visionaries who will guide us out of the economic darkness and into prosperity. The method used is through pursuing "knowledge sector" jobs, and advocating for educational ventures. Whereas venerable, powerful economic development cartels such as Wilmington Industrial Development (WID) focus on attracting and establishing industrial and manufacturing jobs by dangling taxpayer-funded incentives carrots in front of prospect corporations - Cape Fear Future claims to contrast this with a more forward-looking agenda. However, a study of the people involved in both groups paints an interesting picture.

Cape Fear Future is guided by a 47 member board, whose roster can be found here. When compared to the membership of WID, an interesting trend is noticed. The majority of the CFF board members are either members of WID, or have their specific company or business interest represented in both organizations. In fact, several of the CFF board members are voting members on WID's board of directors. CFF and WID share executive roles as well. For example, Jack Barto, President & CEO of New Hanover Regional Medical Center, is both Chairman of Cape Fear Future and the Vice-Chairman of WID, according to WID's list of 2010 directors here. Jim Bryan, Regional Executive V.P. of First Citizens Bank, is a board member of both organizations. Scott Satterfield, the well compensated leader of WID, is, you guessed it, another voting member of Cape Fear Future. WWAY reported a while back that his taxpayer-funded salary reaches beyond $300,000. Eric McKeithan, President of Cape Fear Community College, of who it was just revealed makes $334,000 thanks to taxpayers, is yet another board member of WID and member of Cape Fear Future.

And then there is the media. Bob Gruber, Publisher of the Star News is a member of both WID and Cape Fear Future board member. Gary McNair, General Manager of WECT, is as well. Andy Combs, G.M. of WWAY, is a member of the CFF board. So if one is expecting fair media coverage and a glimpse into the inner workings of these organizations, one should not hold their breath.

In fact, out of the 47 members of Cape Fear Future, the majority is represented in one way or another within WID, calling into question the true separation between the old industrial-focused economic development group; and the new, "forward-thinking" and "visionary" "knowledge-based" and "creative" sector  organization.

WID has traditionally been led by the elite corporate and industrial magnates of our region. This is understandable as their work consists of delving out taxpayer incentives to corporations such as GE and Hitachi. But Cape Fear Future is purporting to be the agents of change, riding the wave of the future, and implementing new strategies to attract the jobs of tomorrow. However, under the same leadership of the hospital administrators, bankers, publicly-funded academia, and other bureaucratic types that control WID; how is it that their economic focus is supposed to be entirely different?

In fact, Cape Fear Future has been so ineffective, that even the same city council that slapped itself on the backs for being so revolutionary in having a hand in their creation, is questioning their abilities. In this article by the Star News, Councilwoman Laura Padgett said of Cape Fear Future, “It hasn’t produced any specific additions to the community”. She also makes an interesting point that Cape Fear Future closes its doors to the outside world, despite a $20,000 contribution by city taxpayers. “They are a closed group of people. You can’t just go sit in on their meetings. You have to be invited”. Mayor Bill Saffo stated that city council needs to get more involved with Cape Fear Future - despite the fact that he is a charter member of both organizations; apparently alluding that he doesn't want to assume that duty upon himself.

So is it helping the community economically to have a myriad of taxpayer-funded alleged "economic development" agencies using the public's money to go off in their own chosen direction, without any accountability, without any benchmarking, and without any transparency? Is it a good thing to have two organizations - one claiming to be the industrial economic driver; the other claiming to be the wave of the future, attracting creative class and knowledge sector jobs - yet both having the same leadership at the helm? Economic data loudly says "NO". According to the NC Employment Security Commission report here, all of 2009 and 2010 reflected an unemployment rate in our area of around 10% give or take. Now into 2011, those numbers seem to be holding steady.

Even though the data is lacking in support of publicly funded economic development agencies' efforts, that isn't stopping the pursuit of taxpayer dollars for such endeavors. Nor is the cheerleading from public officials waning. Several local organizations have been pushing hard for a taxpayer funded local arts council that would serve to obtain both state and federal grant money for government subsidized arts projects.

The Cape Fear Economic Development Council (CFEDC), the only known privately funded economic development group; and other publicly taxpayer-funded groups such as Do it Downtown (DID), Wilmington Downtown Inc. (WDI), Downtown Business Alliance (DBA), and of course Cape Fear Future held a meeting on Tuesday night to garner support form the community for the arts council. Their call for tax dollars would equate to a $50,000 contribution from the city and the county for a total of five years; or a grand sum of $500,000 - what they refer to as "seed money".

A colorful array of corporate magnates, investment bankers, and successful entrepreneurs led the call for more tax dollars for what they consider to be a viable economic driver. However, when confronted about investing their own money in such an endeavor, all but one, Tom Harris, owner of Front Street Brewery, balked at the notion. One of CFEDC's leaders Bill Graham told a packed audience, fairly diverse for and against support, that we have "an emergency on our hands", referring to the window of opportunity to create and initiate the arts council in order to obtain state grant money by April of this year. More on that meeting and the issue in general soon.

The situation in the theoretical sense can be summarized as the attempt to equate the use of taxpayer dollars into some sort of economic return for the taxpayer. However, there has never been a decrease in the tax burden due to the activities of these organizations. In fact, taxes have continued to climb. The total amount of money that city taxpayers have contributed to cultural, recreational, and economic agencies is more than $2.78 million - just since 2008. New Hanover County taxpayers have contributed twice that amount to outside agencies and economic incentives - over $5 million since 2009. For what local leaders refer to as modest investments for our economic health, have become enormous drains on taxpayer resources. At least there is one group, CFEDC, that operates without a hand in the taxpayer's pocket. If only others could take note.

Should we be content with our taxes continuing to increase in order to keep funding initiatives that have demonstrated no real economic growth? Initiatives that host our same elected leaders who sit on their boards, being the ones lobbying and voting for their funding? Agencies who use taxpayer money to pursue unknown goals, and then use their positions as political motivation at election time in order to support certain officials who favor their cause? The taxpayers of this community deserve more respect and appreciation than to be insulted and abused in this manner.

Tuesday, February 15, 2011

Berger on Economic Development & Other Scandals

Last week, New Hanover County Commissioner Brian Berger called a hurried press conference in order to share his thoughts with the community regarding the county's economic development policy, in light of the strategic planning session the county commission recently completed with the Azimuth Group; a Texas firm hired by the county at a cost of $36,000 to taxpayers.

The press conference, which was held at the government center, was advertised virally through email mere hours before the conference was to take place. Several media outlets and 15-20 citizens gathered to hear the newly elected commissioners thoughts. Berger generally covered the traditional methods of economic development employed by the county, and talked of other issues brought up in the strategic planning sessions. Commissioner Berger also shared his ideas regarding the creation of a task force to oversee and make recommendations pertaining to the way in which money and resources are deployed to outside firms in the name of economic development.

However, the media template quickly became something altogether different. Berger sent the word out about the presser through a third party; who had a last minute death in the family; and so word didn't reach the rest of the commissioners until an hour or two before the conference was to begin. One was out of town and the others had previous engagements, and could not make the event. Several dissatisfied emails made their way to Mr. Berger's inbox courtesy of his colleagues regarding the last minute notice. Smelling blood in the water - or at least hoping for such - the local media quickly focused on this as being the story. Headlines like "Berger irked other commissioners" and other such dramatic titles were quickly dispensed. The uncanny sense of selective reasoning that the media displays all too often took hold in a desperate effort to sensationalize rather than report.

Politicians' faces are a familiar scene to almost every engaged American. Turn on Fox News, CNN, ABC News, or any other 24 hour news outlet, and one cannot miss the panels and interviews consisting of various elected officials weighing in on the topic at hand. Such media appearances are coordinated hurriedly and without much fanfare. Calls are placed to officials' offices, and staffers coordinate the interview sometimes within hours of air time. However, one step notably absent is the approval of other fellow officials that serve in similar capacity. A Congressman from Georgia may be a guest on one show - but it is understood that his appearance was coordinated without the consent or even knowledge of other members of Congress. However, this has never been an issue.

Here at home, Commissioner Jason Thompson makes regular appearances on talk radio and other media, but doesn't "clear" these actions with his fellow commissioners - nor should he have to. Chairman Jonathan Barfield regularly sends out an email newsletter to citizens - and the content included is from him and him alone. No other commissioners have any hand in it. But when Brian Berger makes a showing in the media without the approval of his fellow commissioners, it's frontpage news - why?

Brian Berger was elected after an unconventional campaign. Berger is an unconventional candidate. He believes in unconventional things. He fights very unconventional fights. He doesn't fit the mold of what we have traditionally had as county commissioners. He replaces one of the longest standing good ol' boys of all time - Bill Caster. In short, Berger rocks the boat; and having him running around knocking over apple carts without the consent of those who want to micro manage and control his every action simply won't do. Berger makes the status quo uncomfortable - and the last thing they need is for him to appear rational, in charge, and bearing  good ideas. How dare he share new "unapproved" ideas without others' allowance - nevermind that he clearly stated he was there to speak on his behalf alone, and did not speak for the board as a whole.

Chairman Barfield recently unbelievably offered the local media the chance to "partner" with the county commission; whatever that means. At first glance, one would interpret this as being some sort of deal with the devil where news is filtered through a government lens, and only articles appearing friendly to the government "cause" would pass muster. Barfield's mentality in this regard should hardly be viewed as one even in tune with the purpose of the media - so forgive me if I entirely shrug off his position on such things.

If the press was interested in actually reporting instead of creating, then the taxpayers and citizens of this city and county would be aware of our current economic development policy, and the extravagant cost to taxpayers for less than mediocre results. For instance, page 83 of the current adopted budget for New Hanover County states that a total of $5.48 million of taxpayer funds have been given away to outside economic, cultural, and recreational agencies just since 2009! The budget for the city of Wilmington reveals that a half a million dollars has been given to Wilmington Industrial Development (WDI) since 2008; not to mention millions given to other hidden organizations in the name of economic development.

Our local unemployment rate was hovering at and around 10% two years ago. Today, our unemployment rate hovers at around 10%. Millions and millions taken from local taxpayers to fund these so-called economic development agencies, who are completely unaccountable to the taxpayer, and we have nothing to show for it. In fact, Mayor Bill Saffo has recently said that "we are in a jobless economic recovery". Somebody needs to communicate to him that without jobs, there is no economic recovery. The CEO of WDI makes over $300,000/year funded by you and I against our will or consent. In contrast, Secretary of State Hillary Clinton is paid $186,000/year for negotiating and executing US foreign policy.

With our local governments perennially whining about shortfalls and deficits come budget time; the time is long past due where we need to evaluate our local economic development policies and procedures. Organizations receiving taxpayer funding should be subjected to a stringent set of regulations in order to continue to receive funding. An audit conducted by a reputable out-of-state firm that goes back at least 10 years in scope; and that reports on the political implications of the public funding received by these agencies is a good start. To sign your name to a petition to put guidelines in pace and hold these agencies accountable, click here:

These issues need to be brought to the public's attention; but as long as we have a local media corps more interested in tabloid journalism and sensationalism, don't bet on it.