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Public-private partnerships raise questions of accountability

Kevin Spradlin, Cumberland Times News, Md.
Cumberland Times-News (Maryland)
October 2, 2008
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Oct. 2--CUMBERLAND -- A partnership between local governments and an umbrella organization tasked with overseeing economic development in the region would not pose an issue regarding fiscal accountability, officials said.

Sean Mikula, a professional fundraiser from Atlanta, gave members of the Allegany County Chamber of Commerce Economic Development Committee a briefing on what his firm, National Community Development Services, could do in the Allegany County region.

Working across state lines, if necessary, Mikula solicits business owners to invest in their own efforts by way of monetary payment to a new organization or a current agency with a modified mission. The larger investors, in return, would get a seat on the board and have a voice in the way the money is spent.

Mikula said many of the current organizations, including the chamber and The Greater Cumberland Committee, rely on a group of volunteers to move their efforts forward. His idea is to hire a staff to oversee economic development initiatives.

Barb Buehl, chamber president, said Mikula's plan offers "discipline, focus" and an accountability that people's "feet would be held to the fire." That's true in that any employee would be hired on merit -- and could be fired for lack of results.

But what about public accountability? Any time government joins forces with a private organization, there's a chance that some public funds could go into the private entity's coffers -- and be difficult to track.

The local chamber is a prime example. Allegany County government is to pay the chamber $110,000 for a management fee to serve as the county's destination marketing officer. One might wonder what does the chamber, specifically, uses the money for. It's a question Jerry Frantz, county director of finance, can't answer.

State law requires the county to note how much money it pays to whomever administers its tourism program. That's taken care of, Frantz said, by reporting that the chamber is the recipient of the management fee. How they disburse that is up to them, he said.

"It's a hybrid, without a doubt," he said of the partnership between the chamber and the county. "To me, it's a mixed bag that I have apprehensions about. I would prefer someone ... to kind of sign off on that stuff. I guess there's oversight there."

He believes part of the fee goes to pay Kim Shirer, county director of tourism programs.

"In a way, I guess, it doesn't matter to me," Frantz said.

Frantz didn't mean to sound "so free" with those words. However, he's following, and helping to enforce, policy. A management services agreement between the chamber and county, approved by the county commissioners, indicates the chamber is to receive $110,000. All Frantz can do is sign off on the check.

For the record, Buehl said $98,000 of the fee covers wages for Shirer, herself and Ansel Shircliffe, who works part-time for the chamber. Any leftover funds helps cover miscellaneous expenses. The remaining $12,000 goes directly to the chamber.

Frantz said one form of checks and balances is the revenue generated by the hotel/motel tax, which continues to increase and that figure "has grown."

"Whether that's directly linked to what they're doing, or pure accident, or both, I don't know," Frantz said. "Each and every year there's more money coming in. I would say they're doing a good job. If (revenue) started going down, I think people would start complaining."

Buehl said Wednesday there has not been forward movement since Mikula's presentation. Mikula said last week he hasn't encountered any concerns from the media in other markets his firm has fostered such partnerships.

Mikula said the organization would have the "same level of accountability" as does the chamber or The Greater Cumberland Committee and the process is "quite transparent." Buehl said she didn't foresee cash contributions from governments but more of "in-kind services" that could be tracked. And any grant money, she said, requires "detailed accountability."

Buehl also said any board in place, if there was one, would have oversight and ensure funds were spent wisely.

Contact Kevin Spradlin at kspradlin@times-news.com

To see more of the Cumberland Times News or to subscribe to the newspaper, go to http://www.times-news.com/. Copyright © 2008, Cumberland Times News, Md. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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