Governing

Helen Burns Sharp for ATM

On March 2, 2021, Chattanooga voters will elect a mayor and nine city councilors. All elections matter, but this one seems especially important, given the millions of dollars of projected revenue loss due to the 2020 COVID-19 pandemic and the social justice concerns that have mobilized a lot of citizens.


These months leading up to the election provide a great opportunity to have a community discussion. What an ideal time to create a political environment in Chattanooga that recognizes questioning and oversight as an essential function of democratic government and not as a form of political attack.


Several years ago the Times Free Press penned these words: "Local elections are the ground zero of our democracy. It is a daunting endeavor to run for public office, to put yourself out for public scrutiny, to outline policy positions on thorny issues. Running for public office takes courage, a thick skin, and money."


ATM appreciates those who are willing, in Teddy Roosevelt's words, to get into "the arena." We have followed our city government for eight years. You cannot do this without coming away with an appreciation of all of the hours our elected officials spend on complex issues.


While I have at times been critical of the decisions of our elected city officials, I have not meant the criticism as personal attacks. After years of banging my head against the wall advocating unsuccessfully for PILOT policies, a light bulb went off.


I worked as a Community Development Director for a city in Oregon. The elected officials there were not any smarter or more honorable than ours in Chattanooga, and yet I cannot imagine any of the "case studies" described on the "Sunshine" page happening there. A big difference was the structure of the city government. The Oregon city had a council-manager government. Here we have a strong mayor form. 


The structure of our city government may seem boring but it really matters. It influences the political culture.


Below is a summary of some policy areas that need attention, followed by reasons why Chattanooga may want to seriously consider changing from a strong mayor to a council-manager form of government. If the timing isn't right to change the form of government now, let's ask candidates for mayor and council how they plan to address the issues raised below and if they would be willing to consider a charter change in the future.


I. Property Tax Incentives

PROBLEMS


PILOT tax breaks to large companies significantly reduce city revenue for needed services.
The City gets almost 60% of its general fund revenue from property taxes.
The City forgave $16 million in tax revenue in 2019 with PILOTs and TIFs—most agreements last between 10 & 30 years.
The COVID-19 pandemic is likely to result in at least $10 million in lost revenue during this fiscal year (July-June).

Weak/no enforcement if companies don’t meet their commitments.

The City has been overly generous in both the number and terms of PILOT agreements.

No written guidelines on how the city decides which companies get “jobs” PILOTs, leaving awards open to political influence.
The City does have policies on TIFs but ignored them on the MLK Extension project.
Most agreements are one-sided in favor of the businesses.
Many PILOT and TIF companies likely would be here anyway, paying taxes (the "but/for" test).
Housing PILOTs allow companies to charge more than $1000 in rent for very small units.


SOLUTIONS


• Adopt guidelines for PILOT jobs tax breaks. The Policies and Procedures recommended by ATM could be a starting point.
• Follow adopted policies for TIFs.
• Aggressively pursue (“clawback”) money due to taxpayers when PILOT businesses have not met their commitments.
• Consider earmarking the city portion of the money that is clawed back for a new fund dedicated to meeting high priority needs in urban neighborhoods. Include community representation in the discussion for how money is allocated.
• Require Jobs and Housing PILOT beneficiaries to pay a significant fee at closing. (Example: Memphis collects 1% of the total project cost for Housing PILOTs.) Create a role for the City Council in determining how these fees are spent.
• Define roles in economic development program (Chamber of Commerce, Enterprise Center, Convention & Visitors Bureau, City Hall.) Make clear who is doing what, where the money comes from, and what it goes for. 


II.Transparency/Professionalism


PROBLEMS


• Mayor's office does not provide enough written staff analysis to City Council when asking them to take action.*
• Mayor's office does not provide enough staff analysis to non-elected boards (IDB, HEB, CDRC).
• Resolutions and ordinances from City Attorney do not provide "findings” to explain the reasons for the actions.*
• It is challenging for citizens to get information about public records or meetings.
• It is challenging for citizens to navigate the city web site.
• It challenging for citizens to present ideas or give feedback to City Council and Mayor.
• It uncommon for officials to disclose bias or possible conflicts of interest in zoning or tax incentive matters.
• The deck seems stacked toward development interests in the tax incentive, and zoning processes.*


SOLUTIONS


  • Add more content to city resolutions, ordinances, and minutes to give public officials and citizens better knowledge of what is going on and why.*
  • Convene a small focus group to brainstorm improvements for accessing city public records and improving city website. (Include citizens who have been frustrated with the records process or the website.)
  • Hire independent professional to rewrite PILOT in-lieu -of-tax and lease agreements to make the documents better protect the public interest and to be more understandable. 
  • Provide regular training for elected and appointed officials and staff from MTAS or TCOG on the meaning (and the spirit) of the state’s Sunshine Law.
  • Evaluate opportunities for public comment. Add a Council public hearing requirement for adoption of City budget and approval of tax breaks (PILOTs and TIFs).
  • Establish a policy whereby the Council or Commission Chair asks, at the beginning of any meeting where there will be a vote on zoning or tax breaks, if any Councilor or Commissioner wishes to declare bias or a conflict of interest.
  • Appoint neighborhood voices to the Planning Commission as vacancies occur. (Almost all current members of the Planning Commission have development ties.)
  • Adopt environmental regulations to address development in environmentally sensitive areas, such as hillsides and floodplains.*
  • Convene a small city focus group to explore if a different form of government would better serve Chattanooga. Invite representative of the International City/County Management Association (ICMA) to speak about the Council-Manager form of government.


A FEW EXAMPLES


1)  Need for more content in resolutions.*


Contrast these resolutions, one from Chattanooga and one from San Diego, dealing with the disposition of surplus property. 


The San Diego resolution explains how the city got the property; why they do not or will not need it for any public purpose, and gives details on a purchase and sale agreement. San Diego Resolution


Compare this resolution with the one the Mayor's Office and City Attorney asked City Council to pass in 2016 regarding the King Street parking lot, which was being actively used for city employee parking. (See the "Sunshine" web page for history.) Note that there is nothing in the resolution to explain anything. Chattanooga Resolution 


2)  Need for environmental regulations to protect sensitive areas.*


Homebuilders and other development interests have been successful in recent years in weakening the City's stormwater standards on South Chickamauga Creek and in slowing down the adoption of regulations about development on hillsides and in the floodplain. The mountains, ridges, rivers, and creeks are among Chattanooga's greatest assets. Recent development has shown what can happen without adequate standards.


III. Forms of Government


STRONG MAYOR FORM


Chattanooga currently has a strong mayor form of government. Political power is concentrated in the mayor. Members of the city council have much less policy-making power and influence. The mayor has management authority for all operations of the city.


The League of Arizona Cities and Towns made these observations about the strong mayor form:


  • This form of government is highly susceptible to political and financial influence.


  • The strong-mayor form fails to separate policy-making from administration. The mayor is put in the position of developing policy positions and also being responsible for operational implementation. 


  • This system is highly dependent on the management skills of the person in the mayor's office.



COUNCIL-MANAGER FORM


Council-manager is the most prevalent form of government in the United States. More than half the cities with populations over 100,000 use it.


Examples of council-manager cities include Charlotte, Greenville, Dallas, Oklahoma City, Phoenix, San Jose, and Colorado Springs.


In a council-manager government, political power is concentrated in the entire governing body, which includes the mayor and council. Council members are elected by district to represent the people in that district. The mayor is elected at-large, by people from all over the city. The mayor is regarded as the leader of the entire city and presides at council meetings.


The job of the mayor and council members is to set policy for the city. They hire a city manager to manage the day-to-day operations of city government, including oversight of city departments. 


Information from the City of Maryville, TN


"Since 1967, the city of Maryville has been governed under the "council-manager" form of government. This form of government combines the strong political leadership of elected officials with the strong managerial experience of an appointed manager or administrator.

The Council sets policy, approves the budget, and determines the tax rate. It also hires the manager and supervises his/her performance. The city manager prepares a recommended budget for the council's action, serves as the council's chief adviser, recruits and hires the government's staff, and carries out the council's policies. 

Because the council is the legislative body, its members are the community's decision-makers. The manager is hired to serve the council as its full-time executive whose job it is to bring to the community the benefit of training and experience in administering a local government's staff, projects and programs on behalf of the council. 

The manager makes recommendations to the council, but the council may change or modify them. The manager is bound by whatever action the council takes. Almost all council-manager communities have a mayor who is a leader in developing community policies. With the council, the mayor is responsible for soliciting citizen views in forming these policies and interpreting them to the public. The mayor also represents the city in official functions, appoints advisory committees, coordinates their work, and maintains liaison with other governmental agencies and civic groups."


Information from the League of Arizona Cities and Towns:


"The Council-Manager form of local government...creates a bright line between the adoption of municipal policy and the administrative or operational functions of city staff. Under the council-manager form, elected officials on the council are ultimately responsible for making the policy decisions about city functions, budgets, tax rates, planning and zoning, general plans, long- and short-range city goals, contract approvals, etc. They receive information and recommendations from the city manager and generally oversee the performance of city government. They also are the link between citizens in the community and their local government. All governmental authority resides with the council as a body of elected officials.

The council works with a professionally-trained manager to develop policy positions, and then delegates to the manager the responsibility to carry out their decisions. The manager does not set or make policy decisions but is the person primarily responsible for making policy recommendations and for carrying out the decisions of the council.

The manager and his or her management team have responsibility for hiring and firing personnel, for managing city operations within the council-approved budget and for implementing the various day-to-day services of the city. The manager and his or her staff do the background research on various topics in order to present the council with objective pros and cons on policy alternatives.  He or she serves at the pleasure of the council and can be dismissed at any time with the vote of a majority of its members.

The council-manager form of government is unique to the local level in government but it is similar to the Board/Chairman/CEO structure common in private corporations as well as school districts, hospitals and non-profit organizations.


For those who question whether “non-elected bureaucrats” should be in charge of the operations of a unit of government, the council-manager system has generally been shown to be more financially accountable and more efficient operationally than governments in which the elected officials are also the people in charge of directly managing government services and supervising
staff. The system is designed to maximize the strengths of elected officials and local government professionals. It allows elected officials to spend more of their time listening to the concerns of constituents and provides structure to the staff to be able to know that their job duties will be consistent and based on professional standards rather than subject to differing political whims.

The council-manager form has gained widespread acceptance for its attributes of efficiency, professionalism and predictability for city employees as well as residents. In contrast to the strong mayor system, which has the perception of inviting corruption, the council-manager system separates policymaking from operational processes and encourages hiring and contracting practices based on objective, measurable standards rather than cronyism and friendship. The city management profession is also set apart by the strong commitment of its members to a uniform code of ethical behavior."
 

Summary from ICMA


The International City/County Management Association prepared a brief report called "Council-Manager or Strong Mayor: The Choice is Clear."


The authors conclude that the council-manager form gives neighborhoods a stronger voice; diffuses the power of special interests, and means that decisions are more likely to be based on merit rather than partisan politics.


Also, the summary says that, under the "strong mayor" form, the temptation is strong to make decisions regarding the hiring and firing of key department head positions based on the applicant's political support rather than his or her professional qualifications and experience.


Click here to open the  ICMA publication



IV. "Best and Worst Run Cities in America"


Each year WalletHub rates the operating efficiency of 150 of the largest U.S. cities to determine which are managed best. They look at how well city officials manage and spend public funds by comparing the quality of services residents receive against the city's total budget. In the report that came out in June 2020, Chattanooga had an overall ranking of 147 out of 150.


Click here to open the WalletHub report.


The report does not address if or how the form of government might affect operating efficiency. But it interesting to note that four cities in the top 10 are under the council-manager form (including Durham, NC)  or a unified city/county government (Lexington-Fayette, KY). None of the cities in the bottom ten, including Chattanooga, have the Council-Manager form.


Business Facilities magazine annually ranks the best business climates for cities and states. In the 2020 rankings just released for large cities, six of the ten--Austin, Phoenix, Dallas, Charlotte, Kansas City, Las Vegas--have a council-manager government and one (Nashville) has a metropolitan city/county government.


V. How Would Chattanooga Change its Form of Government?

BACKGROUND​


The City of Chattanooga was established by the State Legislature in 1839. The charter of the city was composed of private acts of the legislature until 1972 when city voters adopted a home rule charter.


Home rule charters allow cities to take any actions which are not prohibited by state or federal laws or the federal or state constitutions.


The charter was adopted by a vote of the people and can only be amended by a vote of the people.

The charter has been amended a number of times, through the adoption of ordinances by the City Council that were approved by the voters.


The most famous charter amendment (1990) related to the “Brown” court case challenging the former at-large method of electing "at large" city commissioners as violating the Federal Voting Rights Act of 1965.


The city currently operates under the mayor/council form of government.


The City Council has nine members, each elected from a geographic district for a four-year term. No term limits. Terms are not staggered.


The City Mayor is elected at large for a four-year term. A mayor is limited to two consecutive four-year terms.


THE INITIATIVE PROCESS


There are two ways to amend the city charter.


The City Council can pass an ordinance and put the question on the ballot as a charter amendment.


Or the charter in Section 11.24 provides a mechanism through which citizens may propose a charter amendment. This is known as the "initiative" process.


A measure is put to a vote after being submitted by a petition submitted to City Council. The petition must be signed by qualified voters representing at least 25 percent of all the votes cast for mayor in the last municipal election. 


According to the Hamilton County Election Commission, 18,780 Chattanoogans cast a vote for mayor in 2017, meaning that a petition would have to contain at least 4,695 signatures (25%).


CONCLUSION






Accountability for Taxpayer Money--Chattanooga

~Helen Burns Sharp

July 2020