Quote Unquote 

What movers and shakers are saying about consolidation, IP, and investigations.

T>he city of Memphis' contract with the law firm is for 20 percent of what they collect, which I would love, because my contract is for 2 percent," says Shelby County trustee Bob Patterson. "All city of Memphis property is within the county. So obviously I could send them a bill, since we already bill them for county taxes."

Every year at budget time, city and county politicians insist they have squeezed every dollar of savings and every ounce of fat from the budget. But not everyone sees it that way.

Patterson wants to merge the county trustee's office with the city treasurer's office and create a one-stop shop for tax payments and delinquent tax collections, which he sees as especially extravagant. This is exactly the sort of functional consolidation of city and county government that mayors profess to support, but Patterson is the only public official trying to light a fire under the idea.

The city of Memphis currently outsources the job of delinquent tax collections to a Texas-based law firm, Linebarger, Goggan, Blair & Sampson.

Last year Memphis paid Linebarger approximately $3.2 million for collecting $16 million in delinquent taxes. Patterson says he could have done the same job for $320,000 and only had to add six new tax collectors.

"We collected $21 million in delinquent taxes last year, $28 million the year before, so we could probably get the $16 million that Linebarger gets," he said.

Memphis contracted with Linebarger in 2004, even though a partner who no longer works for the firm had pleaded guilty two years earlier to bribing public officials in San Antonio. Repeated calls to Linebarger's Memphis representative, former assistant city attorney Gwen Hewitt, were not returned.

Patterson has brought the idea up several times since a merger agreement he had worked out with former Memphis mayor Dick Hackett was scrapped by Hackett's successor, Willie Herenton. Patterson said he has met with Herenton twice this year to talk about delinquent taxes.

"He has indicated he will have subsequent meetings," Patterson said. "It only requires his signature."

"I think the sale has probably already been made," says real estate magnate Harold Crye of the negotiations between Memphis and International Paper to move the company's headquarters from Connecticut to Memphis.

Crye-Leike sold hundreds of homes to IP employees when the company moved most of its operations to Memphis in 1987. Crye, who now lives in Nashville, said "the South's time has come" and that both Memphis and Nashville should prosper from additional corporate relocations.

Waymon "Jackie" Welch, head of Welch Realty, said even if only 75 of the 134 IP employees working at the headquarters in Connecticut move to Memphis it will have a ripple effect. "When they originally came here it just eliminated the high-priced inventory, and the owners who sold moved up in price," he said. "We will see that same thing again. It will be a huge boost to East Memphis and Germantown."

"I have three words of advice when anyone gets a call from the FBI," says Shelby County attorney Brian Kuhn. "Cooperate, cooperate, and cooperate."

So said Kuhn, confirming that federal investigators revisited the county pension office last month. Their focus is the fund's investment in Delta Capital, a venture capital fund in which former Shelby County mayor Jim Rout invested before changing his mind and getting his money back.

Ironically, Delta Capital, which accounts for only 1 percent of the pension fund portfolio, has been one of the better performers, earning 7.8 percent a year since 1999, according to a report given to pension board members this week. Rout said he has not been questioned since talking to investigators more than a year ago.

The Riverfront Development Corporation last week took another step toward construction of the $27.5 million Beale Street Landing connecting Tom Lee Park to the cobblestones. A public hearing was held on dredging the entrance to the harbor. Comments can be sent to mike.lee@state.tn.us until August 11th. If a permit is granted by the U.S. Corps of Engineers, dredging at the tip of Mud Island will start in the fall. The landing, including a floating dock and man-made islets in the river, is scheduled to open in the spring of 2008. Benny Lendermon, head of the RDC, said the harbor will remain open when the park is finished. n

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