In the Public We Trust

Is the Public More Trustworthy Than City Staff?

Ronney Reynolds called it a zoo. Daryl Slusher described it as making sausage. And Beverly Griffith, complete with hand gesticulation and a generous "Whoom!" depicted it as a barreling locomotive.

All three were waxing descriptive on the haphazard and protracted road the city went down to privatize the Austin Convention & Visitors Bureau (ACVB), a proposal that finally came to pass at last Wednesday's worksession with audible sighs of relief from all involved -- sausage-makers, monkeys, and engineers. It was the culmination of two tortuous months of misinformation warfare and unadulterated finger-pointing between city staff, two council watchdogs, the newly-created ACVB board, and, of course, the city council.

The fact that the ACVB is only the second full city department to be privatized in nine years (Brackenridge Hospital was the first) does not alone explain the difficulty surrounding its emancipation from the public world. Similarly large hairballs have also occurred of late with efforts to privatize the mother of all city departments, the Electric Utility Department, and the neighborhood health clinics, so there has been plenty of opportunity to practice.

The common denominator: In each case councilmembers have blamed city staff for a privatization bias that results in misleading information. And as a result, citizen advocates have been brought to the bargaining table to counter staff's alleged misinformation.

In the case of the ACVB, Jackie Goodman blamed city staff for making false promises to secure council approval for their ultimate goal: giving around $3.3 million a year for five years to a non-profit board of tourism representatives, the ACVB board, which will attempt to attract conventions to Austin. The item first came to the council on August 1, and it was a horrid wreck. Reynolds was in hyper-state to get it approved. Since former ACVB director Karen Jordan was leaving the city on August 15, Reynolds marked that day of departure as the deadline for passage, a sort of going away present to Jordan for all her hard work.

But by the first meeting's end, another possible reason for Reynolds' eagerness soon came to the fore. He has deep connections to the tourism industry (see last week's "Council Watch"). But it turns out that the weak by-laws created for the proposed non-profit would have allowed rampant shenanigans. They permitted only four public meetings a year, and actually encouraged boardmembers to pursue contracts with the board upon which they sat. All the councilmembers but Todd and Reynolds wrangled endlessly with staff on getting more public accountability provisions put into the by-laws, such as open meetings and open records. Some of those proposals were accepted, some were not, but after that first laborious meeting, the non-profit was created. According to the newsletter In Fact, Jordan told "privatization boosters" in the hallway, "I want a really big going away party."

Jordan's party was apparently too much fun. When the proposed contract was presented to the council on September 26, it included none of the promised public accountability provisions. As a result, the portly twins of terror -- council watchdogs Leonard Lyons and Jim Hudson -- circulated their own proposed contract, which did include the provisions. Also floating around were copies of earlier contracts that had been scratched. A five-member council majority, led by Goodman, took more interest in the twins' proposal, and Reynolds blamed the duo for confusing the process.

But the confusion over multiple drafts was largely Jordan's own fault. She had hired John Boehm, an attorney with the Houston-based Fulbright & Jaworski, to help Charles Griffith, a city attorney, draft the city's version of the contract. And because the ACVB board didn't approve of everything that had been included in that contract, Jordan hired a third lawyer, Curt Ashmos, of Locke, Purnell, Rain & Harrell, to represent the ACVB board. Ashmos was paid with city money, not money from the board. Nonetheless, he worked directly against the city, negotiating with Griffith for provisions acceptable to the ACVB board. That's the reason so many contracts were floating around. Councilmembers could not tell whose contract was whose, and the show was put on hold until last Wednesday's worksession.

There was confusion at the worksession as well. Assistant City Manager Marcia Conner presented yet another contract that Lyons and Hudson, ACVB boardmembers, and city staffers had sat down and created on the Sunday before. This new version contained most of the terror twins' safeguards for public accountability. Differences remained, though, and at the worksession, the mayor immediately called the twins to the podium. Lyons brought his suggestions on colored paper. "So no one would get confused."

"I appreciate that, Leonard," responded the mayor, "but I don't think I was confused."

"You sure seem confused, mayor," replied Lyons, and Reynolds immediately jumped in to break it up and call for civility.

Lyons and Hudson did not get all of their requests in. Most importantly, they failed to convince the council to limit the amount of incentives that the board can use to attract conventions. Hudson, along with Music Commission chair Carlyne Majer, did get the council to ensure that at least during the first year, the ACVB board would spend $150,000 on music and film. Hudson was wary that the board would cut the city's three music and film employees, as they are paid with ACVB money.

Off to the side, and not at the negotiating table, sat Carl McKee, interim chair of the ACVB board. McKee did not want the money to be guaranteed for music and film -- or for anything, for that matter. He, like Reynolds, was upset that the terror twins were throwing their weight around -- the pair's bargaining power was equal to his own board. He had reason to be annoyed -- the board had been created to negotiate a contract with the council. But staff had angered the council, and especially Goodman, to the point that they were willing to listen to any alternatives. In fact, Conner admits that the language in the original contracts was flawed. She says it was simply copied from "boiler-plate" contracts. Staff didn't do their homework. The terror twins did.

In the end, only Griffith and Slusher voted against the contract. Citing the convoluted process, Slusher noted, "The idea is that sausage is supposed to taste good, you just don't want to see it made. But I don't think this tastes good."

A similar bad taste had formed in some councilmembers' mouths when former Health and Human Services Director Sue Milam considered privatizing the health care clinics this past summer, citing the clinics' inability to compete with the private sector. Those who work at the clinics and support health care services for indigents rose up at a public hearing in late August to protest Milam's performance, accusing her of allowing the clinics to deteriorate, in order to further privatization goals. They claimed that she had refused to follow the advice of a city-paid audit that offered recommendations on how to improve the clinics. "If you've already decided that your goal is to farm the clinics out, then you want to paint the bleakest picture you can," explains Griffith.

Griffith credits the clinic employees and advocates who showed up at a council meeting for pointing out how city staff was allowing the clinics to languish. They provided a much-needed dose of reality to Milam's runaway train. The lesson Griffin has learned, she says, is that council must "get all the stakeholders involved. Let the ideas and people in, and the truth will come out." At the protesters' behest, the council subsequently balked at approving a board pre-selected by Milam that was set to consider whether to privatize the clinics. With Griffith in the lead, councilmembers complained that Milam's board was stacked with privatization promoters, and demanded that health care advocates, clinic representatives and employees be added for balance. After the coup, Milam quit for a job in the private sector.

And, of course, there was the Electric Utility Department (EUD) situation last spring. Former Councilmember Brigid Shea complained that staff duly supported Todd's desire to privatize it. A performance review of the EUD presented a frightening picture of a deregulated future, and a compelling argument to privatize it, since many customers would probably leave the EUD for electric providers. It did not mention, however, that the EUD would likely have a competitive advantage that would require the departing customers to pay a fee for their portion of the EUD's $1.7 billion debt. Citizen advocate Tom "Smitty" Smith, of Public Citizen, pointed out the excluded information to the council, and it was one of the major bombshells that turned the council against the EUD.

In each case, the misinformation by city staff, who are supposed to be the experts, has pushed the council against privatization. And as a result, citizen advocates have gained more credence with the council. And while the ACVB privatization process may seem like a zoo to Reynolds, it's much more than that. It's democracy. It's monkeys making sausage on a runaway train. And when the public isn't being served, they have every right to step up and do something about it.

"The most important thing... I've learned is it is possible to affect change," says Lyons. "Staff will fight you tooth-and-nail until the last minute, but if citizens can stay aware, it will work. It has to, because as we go down the road to privatization, we will go through this torture again."

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