Changes in local government, part III
Published 12:00 am Thursday, February 22, 2018
Last time, we looked at downsizing city government to bring it in line with other cities in our size range in Mississippi. More will follow on that issue in the weeks and months ahead. Today, we need to consider briefly an issue we know the city and others are currently looking at — the recent financial review of the Natchez Convention Center (NCC), and who is going to be running NCC in the years to come.
A request for a 10-year NCC audit resulted in a lite 3-year financial review of NCC operations. It began in September 2017 and concluded Jan. 23, 2018. It was released Feb. 6, after a stalled public records request and claim by New Orleans Hotel Consultants (NOHC) that it contained NOHC proprietary information protected by statute. The review indicates that NOHC stonewalled records requests from September through Nov. 15, 2017, and again objected to release of the public financial review when finished.
The review should give you zero warm glow about proactive transparency in local government. Instead, the message is that taxpayers will have to be ever alert, vigilant and continue to demand transparency. Do not blame others for mismanaging your money if you do not now get personally involved in calling your elected officials to open the NCC curtain. Toto cannot help us, and we definitely are not in Kansas.
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First, the review only interviewed current personnel at NCC, NOHC and Natchez Convention Promotion Commission director Jennifer Combs. People with personal knowledge who can document mismanagement of NCC after it was turned over by the city to NOHC in 2007 have not yet been interviewed. There are at least a dozen or more of them, and the names have been provided to the city and NCPC.
Second, the financial review erroneously implies that “management of the City Auditorium was transferred to Christ Life Church in 2013.” There was no transfer by NOHC. What actually happened is that the city unlawfully entered a separate management agreement with Christ Life in 2013. It bypassed NCPC, the proper party to make agreements on tourist facilities. Deal made, the city went right back to sleep and now has had a tenant move out, claiming unpaid rent and removal of auditorium improvements. Of course, the 2013 agreement is additional proof that the 2007 agreement with NOHC was gone in 2012 on all properties. But the city slept on.
Third, the review confirms that NOHC failed to comply with the contract, and did not deliver true and correct financial statements and supporting documentation. Said the consulting CPA “there is no evidence that Consultant provided annual profit and loss statements nor annual budgets to the city in a timely manner.”
Fourth, there has been a precipitous decline in NCC and Natchez Community Center rentals since 2014. Witnesses tell me this is because rentals have been waived for certain politically connected Mardi Gras krewes and other local organizations. There are possible Mississippi Revenue ABC violations to review. More investigation is needed.
Fifth, the consulting CPA reports “many significant adjustments and reclassification entries were recorded by [NOHC] in the income accounts for the years 2014-2017.”
Sixth, NCC payroll has steadily risen, despite rental revenue declines.
Seventh, the review validates independent caterer complaints that they have been systematically shut out of at least 71 percent of all NCC catering. That‘s right — NOHC, which does not have a full kitchen at its adjacent hotel and cooks meals for its hotel functions using NCC facilities and equipment, does 71 percent of the NCC catering. This practice appears to violate the “local preference” clause in Section 3.3 of the expired 2006 agreement, and also may create a conflict of interest. It is pretty hard to be a fiduciary and a businessman at the same time.
Finally, NOHC admits that it is a fiduciary to the city under the expired 2007 agreement. To the extent NOHC has made any profits as a result of its relationship as fiduciary and manager of NCC and other venues or due to the relationship between city/NCC and The Natchez Grand Hotel, it likely has a conflict of interest under Mississippi law, according to Mississippi counsel.
So, what happens next? Will our old, tired lady draw a hot bath and scrub herself with deep cleaning soap, or will she just spray a little Febreze around and happily whistle while walking down our empty sidewalks and streets, past our empty restaurants, handing out certificates of appreciation, free convention center rentals, and bring your own booze, all at the same time critical, fundamental municipal functions like garbage contracts, police and fire and consolidating duplicated city services are ignored? We can clean this mess up, but it takes all of us, with firm resolve, feet on the ground, firmly planted, demanding the needed changes.
Paul Benoist is a Natchez resident.