Thursday, August 20, 2015

Joplin City Council to discuss Chamber contract during special session

The City of Joplin's contract with the Joplin Area Chamber of Commerce, which was heavily criticized in the state audit, will be discussed during a special City Council meeting 6 p.m. Monday, August 24, in City Hall. The city's annual tax levy hearing is also on the agenda.

The audit showed that Joplin pays the Chamber far more than what is paid in cities of similar size in Missouri.

From the audit:

The city did not properly monitor its contract with the Joplin Area Chamber of Commerce and provides the chamber significantly more funding than some other cities.

The city last amended its contract with the chamber in 1991. The contract provides for the city to fund the chamber for economic development based upon the amount approved in the city's annual budget and requires the chamber to submit receipts, vouchers, or other documentation to verify the expenses for economic development. The city's fiscal year 2014 budget provided for $335,000 in funding to the chamber.

The chamber invoices the city on a monthly basis for actual costs incurred including a portion of the salary and benefits of three employees, the Chamber President, the Director of Member Service and Development, and the Chamber President's executive assistant.

The city also reimburses the chamber a percentage of office telephone, vehicle, and equipment expenses, and actual expenses related to economic development including cell phone bills, meeting and travel expenses, membership costs, and other miscellaneous items. We noted concerns in our review of the city's contract with the chamber and various documentation.

-The city did not ensure the chamber complied with the terms of the contract. The contract requires the chamber to file its independent audit reports with the city, however, the chamber had not filed them with the city. At our request, the city obtained the chamber's independent audit report for the two years ended March 31, 2014.

-Invoices received from the chamber did not contain adequate detail and amounts charged to the city were inconsistent. For example, the chamber's March 2014 reimbursement request did not provide adequate documentation to support the salary and benefits paid to three chamber employees totaling $7,860. Also for March 2014, the chamber requested reimbursement for 30 percent of the phone bill ($485), and 40 percent for both automobile expenses ($188) and equipment expenses ($1,822). There is no basis for the variance in percentages between expense categories in how the percentages (which do not change from month to month) were originally established. Also, the chamber did not submit documentation, such as phone and mileage logs or invoices, to support those requests.

The city also did not adequately review documentation to ensure amounts requested for reimbursement were accurate prior to payment. For example, the chamber submitted a bill in December 2014 requesting the city reimburse $448 for an economic development breakfast meeting and the city paid the entire amount. However, the attached invoice indicated the chamber had also requested that the United Way reimburse the chamber half of the bill ($224).

Documentation received from the chamber for reimbursement of lobbying services costing $35,000 was also not adequate. The chamber did not provide an invoice or other documentation showing proof of payments or services rendered on behalf of the city by the lobbyist.

-The city reimbursed the chamber for several expenses that were either incurred by the chamber for several expenses that were either incurred by the chamber without prior knowledge of the city or were questionable. For example, in November 2013, the chamber requested reimbursement of some master developer (Wallace Bajjali) costs it had incurred totaling $7,500, including an economic impact study for professional baseball in Joplin costing $5,750 and architectural drawings for a medical school expansion/performing arts center costing $1,750. However, the finance director and former city manager were not aware these costs had been incurred on behalf of the city by the chamber. The former city manager subsequently approved reimbursement of these costs. Additionally, it is unclear why the city reimbursed the chamber $1,150 or half the cost of a custom mural in August 2014. 

The finance director did not know the mural's location or why the city paid for part of it. In another example, during February, April, and October 2014, the chamber requested reimbursement for the purchase of three smartphones and a headset costing $1,446, and it is questionable why the city would be purchasing chamber equipment.

Also, we reviewed chamber invoices for the smartphone and determined the chamber (and as a result the city) was overcharged $450 for one smartphone. The smartphone vendor credited the chamber's account for this amount on its February 2015 statement, and it was adjusted from the economic development expense requested from the city for February 2015.

-The city paid the chamber $342,685 ($335,000 budgeted, plus $7,645 for miscellaneous expenses not budgeted) during fiscal year 2014. We contacted three cities with similar or larger population to determine the amount of funding provided to their local chamber organizations for each city's most recent fiscal year for comparable services. Joplin provides for significantly more funding than the other cities.

Joplin, population 50,150, annual amount of funding to Chamber $342,645

Jefferson City- 43,057, $185,000

St. Joseph- 76,780 $175,000

Chesterfield- 47,484  $25,983

To ensure city funds are spent wisely, the Council should evaluate the amount of funding provided to the chamber. The Finance Department should monitor the contract to ensure compliance with contract terms. Only by receiving detailed invoices to support the services provided and payments made can the city ensure the amount claimed for reimbursement is accurate.

The city's response was included in the audit:

The Chamber of Commerce provides economic development services for the city. The Council has begun the process of reviewing the level of funding provided for this service. Additionally, the city is also working on developing a new contract with the Chamber, which will outline various expectations such as the documentation required to make payment to the Chamber. The updated contract will assist the Finance Department in ensuring proper documentation is obtained prior to making payment.


Anonymous said...

Wow, I never fully understood the relationship of the Chamber and a city. It seems similar to that of a union representing a group of employees. Joplin pays a fee to them, and in return they represent and lobby on the city's behalf. They say that public sector unions have a conflict of interest, but I have never heard in that in the Chamber/city relationship. In these parts union is a cuss word and I am sure we will never hear Mr Obrien as a union boss or any other negative term which we use for union representatives.It will be interesting to see this play out.

Anonymous said...

Mr. O'Brian isn't a "union boss" in the sense that he's not the head of a conspiracy of one group of workers, members of his union, against all other workers. While some corruption in the form of favoring some companies over others is inevitable in an organization of human beings (we see this in how he was a part of wiring the master developer contract to Wallace-Bajjali), officially any company can join for $30 plus an annual "$350.00 plus $5.00 for each full-time employee" equivalent.

The state government isn't requiring membership like closed shop unions in Missouri can. Nor have we ever heard of a Chamber of Commerce murdering entire families in power struggles or because they weren't members, let alone lessor forms of violence, outside of Hollywood where all businessmen are evil.

Anonymous said...

Good points, but I would say that favoring one company over another is a form of harassment. B I would like an example of a union killing entire families, particularly here in Missouri. That's a little sensational and outdated.

Anonymous said...

I had no idea that taxes went to the Chamber. At least the unions fund themselves. Isn't it ironic that the Chamber uses tax money to carry out the anti-union agenda for the corporations. And what have the Chambers provided us nation wide? Nothing. Factories are still leaving in droves for Mexico. Perhaps it is time we reconsider whether this is a good use of our taxes?

Anonymous said...

Tough for the Chamber to hold itself out as the torchbearer for free enterprise and take tax money from the City at the same time.

Anonymous said...

They take over 300,000 from taxpayers and collect how much in memberships? They list a directory of over 7500 at $380 that over 2.8 million. Is Mr Obrian double dipping? What is his total compensation not just from the city.

Anonymous said...

I would like an example of a union killing entire families, particularly here in Missouri.

8:05 AM: Just click on the link I supplied! Or this one.

It's from the Wikipedia entry on Joseph Yablonski, who with his wife and daughter were indeed murdered by union thugs in December 31, 1969. Is that "a little sensational"?

Yes. Outdated? Maybe, the public sector/service unions now running things just don't have good thugs like industrial unions could produce (seriously, but they're happy with the Star Chamber/Gestapo raid thing), but I think it's a useful reminder of how unions act when they're powerful, along with the murder of John Galt (really) the next year.

He was working for Tri-State Motors, a trucking company headquartered less than a mile from the home where I grew up in Joplin, and the place where I moved to after the tornado. The dynamite the union thugs blew up by shooting his trailer was just picked up from the nearby Atlas Powder Company.

That close enough to home for you? It was for me when I was in a R-VIII, excuse me, now Joplin Schools elementary school back then.

Anonymous said...

3:46. I am aware of that story, it is nearly 50 years ago. We actually discussed this in a class at Southern. So you have 1 incident in the last 50 years, committed not by the union, but a solo member acting on his own. Unions for the most part do not conduct themselves in that way. This is not the prohibition era. (Unless you count the edited Fox News beat down of the anti union man who incited a fight in Wisconsin a few years ago with union members.) There are hardly any private sector unions left in this country. We all know the history of the old unions, but if you want to go there lets talk about the Pinkertons or the many machine gun murders of NUMEROUS coal miners an their families back in the day. Look up the Christmas massacre in Northern Michigan of iron ore miners. Some real peaches those business men! They use to patrol the mining towns with machine guns.

I am not trying to start an argument here, I am just very surprised to learn that TAX DOLLARS are being used to fund Chamber of Commerce. It should be funded by its members, just like a union. How can you justify giving tax money to a group that supports the anti-union congressional candidates. The only way to make this fair would be to support giving unions equal financial tax support. And while we are at it, make the Chamber represent the non-dues paying members to the fullest. "Right to work", remember?

In my opinion, neither should get our tax dollars.

Anonymous said...

Does anyone wonder why an organization like the newly established Live JOMO exists? Looking at their website it seems like they provide services similar to those the chamber claims to provide. And why do groups like Downtown Joplin Alliance focus so heavily on economic development when the chamber claims that's the reason for their existence? It's simple. The chamber isn't doing what it claims it does. There's a huge need for small business services and advocates who care about building the city rather than their own bank accounts.

Take this weekend for example. Jon Buck and his Live JOMO organization, along with Downtown Joplin Alliance put on a huge event with the sole purpose of bringing people to Joplin and in the process, generating tax revenue. Where was the chamber? Did they have anything to do with it? Did they support it with their war chest of our tax dollars? I'm willing to bet they did not.

The chamber as a model could be efficient and effective. It has hundreds of members and seemingly endless resources. But it currently has a staff of more than 20 "yes" people and one narcissistic leader. Trim the staff and replace the president with a visionary who can put the success of Joplin ahead of everything else. That would be a start.

And just a side note, guess where the chamber is holding their mega business expo in January of 2017? Downstream Casino. That will be great for Joplin.

Anonymous said...

733. I couldn't agree with you more on this. Great post. Perhaps the city council needs to hear you're thoughts.