Friday, March 24, 2006

Exemplary Agency?

Riverfront Development Corporation claims big savings, but some aren't buying it.

Posted By on Fri, Mar 24, 2006 at 4:00 AM

Maybe the Riverfront Development Corporation should expand its reach.

While the city of Memphis pinches pennies, the RDC has cut park admission fees, added concerts, set an exemplary standard for grounds-keeping, and forged ahead with a $28 million addition to Tom Lee Park. With a staff and board of current and former City Hall bigwigs, the RDC claims it has saved taxpayers between $2 million and $7 million by taking care of riverfront public spaces for the same dollars the city was spending back in 1999.

So, is there a model of innovation and efficiency here that could help the city erase its deficit and hush the complaints of cranky citizens? City councilman E.C. Jones doesn't think so. He says the RDC, which some councilmen say stands for "retired directors club," is a luxury that Memphis can't afford. His criticism last week drew a response from RDC board chairman and former city chief administrative officer Rick Masson, who said the RDC saves the city money and without it riverfront costs would "explode."

Who's right? Sorting out interconnected budgets is a little like trying to figure how much it costs to run part of your house or raise one of your children. To understand the nonprofit RDC, it's useful to look at three Fs: finances, foundations, and focus.

Finances: The "same dollars" line is the RDC's usual response to criticism from the media and City Council members. The basis for it is the RDC's annual $2,394,830 management fee for five years. When the RDC was formed, that's the number the city came up with for what it was paying for riverfront parks in 1999 under the Memphis Park Commission. John Conroy, one of three former city division directors who now work for the RDC, says parks division expenses prior to 1999 were trending upward at 14 percent a year. Since 1999, overall city expenses have increased 4 percent a year. Hence, he says, a "conservative" estimate of savings is $2 million.

John Malmo, chairman of the Park Commission before the RDC was created, says "it is probably playing fast and loose to say it is being done with the same dollars."

The RDC has four executives who make close to or in excess of $100,000 a year, but there has been no offsetting reduction in management at the Park Commission. Those trucks with RDC logos are city trucks donated to the RDC. And the city's General Services division does plumbing, electrical work, and painting for all parks.

Unlike the Park Commission, the RDC outsources grass-cutting to a private contractor who owns the mowers and other equipment. The RDC's own staff of 35 full-time employees does horticultural work such as the plantings in the medians on Riverside Drive.

Conroy says there were "tremendous inefficiencies" at Mud Island Riverpark before the RDC stepped in. Now, he says, instead of having a single job, an employee might operate equipment one day and pick up litter another day.

Foundations: The RDC has raised $2.5 million in private funds that the city would not have gotten otherwise, Conroy says. The biggest donors are the Hyde Foundation and the Plough Foundation. The money is used to augment salaries and pay for office space, marketing, and some operational expenses.

"Not-for-profits have a better record of attracting private-sector funding than government," says Masson, who is executive director of the Plough Foundation.

Foundation support has helped the RDC eliminate admission and parking fees for Mud Island and put on a summer concert series at reasonable prices.

Focus: Conroy says when he worked for the city there were several divisions that had riverfront responsibilities, including Housing and Community Development, Parks, Engineering, and Public Works. "Nothing was coming of it because everyone had 100 things to do of equal priority," he says.

The RDC's domain includes 10 parks; the Park Commission has 180. Last summer, while many city parks were overgrown, RDC parks were neatly trimmed. Masson says RDC employees possibly feel more "ownership" and responsibility.

Its record, he admits, is hard to duplicate, although the Memphis Zoo and Shelby Farms have somewhat similar nonprofit operators.

"Could you set up not-for-profits to take care of different sections of the city? I don't know. Slow expansion of the RDC might be more practical."


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