roddy report

7/27/2019 Roddy Report

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DAVID W. SWEENEYCLERK I LEGAL COUNSELST LOU IS BO RD f LDERMEN

MeJ TIorandum

BOARD OF ALDERMENCITY OF S INT LOUIS

MISSOURI

To Parks and Environmental Matters Co mmittee MembersFrom David SweeneyDate 172 14Re Report re Resolution Number 33

Committee Members-

Please find attached a draft report to be presented for next week s Parks andEnvironmental Matters Committee meeting scheduled for Thursday January 23 , 2014 at10 a mThis report is a draft and subj ect to revision and change.Please contact me if yo u have any questions.

ThanksDave

Cc; Chairman Joseph Roddy

Room 230, City Hall SI Louis, MO 63103 314) 622-3287 Fax 314) 622-4273 Email: [email protected]


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St Louis Board of Aldermen Parks and Environmental Matters Committee Report tothe Board of Aldermen as agreed by Resolution Number 33 dated May 3, 2013.

Introduction At the request of Audit Committee of the Metropolitan Zoological andMuseum Dis t rict (ZMD), the Board of Aldermen authorized the Parks & EnvironmentalMatters Committee to convene hearings for the purpose of examining the structureand organization ofthe Missouri History Museum, executive compensation, and allother related matters and we further direct the committee to include in such discussionMr. Ray stranghoener, chairman, and Dr. Robert R. Archibald, President of the MissouriHistory Museum and all other parties and documents deemed appropriate andnecessary by the Parks and Environmental Matters Committee to conduct a fair andthorough investigation .Problems uncovered by the recent audit of Missouri History Museum have been welldocumented by public news sources and included, but were not limited to the purchaseof property by the Missouri History Museum (MHM) from a former Trustee without anappraisal, the granting of 14 weeks of vacation/writing time to the former President ofthe Missouri Hi story Museum and the lack of documentation of actual time off, and thesubsequent payment of over $500,000 for unused vacation and payment of $270,000for a consu lt ing agreement upon the resignation of the President.Additiona lly, the Audit Committee asked that rumors of mistreatment and wrongfultermination of emp loyees be investigated .As a result of these allegations, this Committee has conducted hearings on the matters,and with the goal of restoring public confidence it requested the assistance of the StLouis Circuit Attorney .The Circuit Attorney agreed to investigate, but citing state statute that limits her abi li tyto conduct only criminal investigations, she declined to investigate employment issueswhich would not be criminal. The report of the Circuit Attorney s findings is attached asexhibit ATherefore, at the request of this committee the City Counselor investigated theallegation of inappropriate employee treatment or termination. A report of theirfindings is attached as exhibit BBackground of ZMD Dedicated Tax - In 1971 voters approved a 4 cent property tax forthe Zoo and Art Museum , and 1 cent tax for the Science Center, and established the 8member Metropolitan Zoological Park and Museum District (ZMD Commission). In 1983


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the tax for the Zoo and Art Museum was increased to 8 cents and the tax for the ScienceCenter was increased to 4 cents; and concurrently the voters admitted the MissouriBotanical Garden w ith a 4 cent tax. In 1987 the voters admitted the MHM to the ZMDwith a 4 cent property tax. The combined ZMD dedicated property tax currentlygenerates over 73 million per year. Over the term of th is dedicated tax xxx has beenraised and pa ssed through to the 5 benefiting institutions.

2012 Tax Tax Rev Rec'dInstitution Revenue Rec'd 19xx - 2012o otanical Ga rden 10 mil xxxmil

StL Zoo 20 mil xx xmilMo Hi story Mu seum 10 mi l xxxmi lStL Sci ence Center 10 mi l xx xmi lStLArt Mu seum 20 mil xxxmi l

Total 70 mil xxx mil

This dedicated tax revenue has allowed the once struggling institutions to flourish,expand, and in several cases to become wor ld class institutions .In 1971, after the successful vote of the people, the Metropolitan Zoological Park andMuseum District (ZMD) Commission was created. Mo Rev Code 184.350-384) Thestatute states

The metropoliton zoologicol park and museum district shall collect all revenueson behalf of such sub districts and shall deposit same in separate sub districtfunds respectively. All funds collected for a sub district shall be kept separate andapart from any other f unds and shall be drawn upon by the proper officers ofthe sub district upon submission of properly authenticated vouchers. Thedistrict m y render common services ta the various sub districts including but notlimited to auditing, accounting, pension servicing and payrall. n performing suchservices the board is hereby authorized to employ and appoint such persons asare deemed necessary, to fix compensation and to couse the removal ofem ployees and appointees of the board.

The recent audits and media reports also indicate that the oversight of ta x payer fundshave not received strict scrutiny by the ZMD or the Sub district Commissioners, andresulted in some operating decisions that may not have been in the best interest ofthetaxpayers.


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As a result ofthe investigations and hearings, the Committee believes it is in the bestinterest of the taxpayer to recommend that the ZMD and Sub district Commissions giveserious consideration to the following recommendations.

Summary of Recommendations

I Appointments and their Roles and Responsibilities - This Committee believes thatthe roles and responsibilities of the many people contributing to the ZMDmember in stitution need to be clarified and since the sk ill s of these people willdetermine success, this Committee respectfu lly requests that the Mayor andCounty Executive consider the skills and experience necessary for a ZMD or subdistrict Commissioner to fu lfill t heir se riou s fiduciary obligations, whenappointing members to the Commissions.

II Develop a Regional Plan - The Committee believes that t he ZMD has theresponsibility of providing leadership in developing a regional plan for thegrowth and advancement of the cultural district.

III. ZMD District Policies and Funding Agreements - The Committee believes thatthat the expend iture of the dedicated tax funds deserves more scrutiny thanproper ly authenticated vouchers' and that the ZMD should establ ish DistrictPolicies which outline policies & standards with regard to performance,compensation and benefits, ethics, and other topics deemed pertinent by theZMD, prior to setting the next year's tax rate, and prior to reimbursing the subdistrict expenditures

IV Report to the Community-Each year the ZMD should prepare an annual reportto the com munity that presents and updates items I, II and III above.

V Respond to this Report-the St Louis Board Aldermen respectfully request theresponse of the ZMD wit hin 90 days.

A more detai led discussion of the above recommendations follows, but first adisclaimer. Whi le this report recommend s changes, and at times is crit ica l, it should notdetract from the opinion of this committee that collectively the public privatepartnership model used to expand these institut ions has been a great success. There isfar more right than wrong. The centerpiece of that success is the generosity ofbenefactors, volunteers, and dedicated staffs .


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I. Appointment and their Roles and ResponsibilitiesThe controversy over the Missouri History Museum begs the question: Why was theresuch a divergence of op in ion of the ac tions ofthe Mi ssouri History Museum trustee smost of whom were vo lunteers who contributed their time and money for what theybelieved was a good cause, and the genera l public? It is the belief of the committee thatbecause of the unique governance structure sub district and ZMD commissionersabdicated their authority and responsibility.The fact the sub district in stitutions are public private partnerships and that the publicportion is regional creates problems of unity of decision making. The state, county andcity all play roles in the governance of these organizations is further complicated by thesp lit authority of the sub district responsible for operational decisions and the ZMDresponsible for taxing decisions. Meshing the needs of the public with those of priva tedonors further complicates the puzzle and the contract ing out of decision making bythe sub districts at the Missou ri History Mu seum and Missouri Botanical Garden addsyet another layer of decision making. In the case of the Missouri History Museum, thetrustees felt they had the authority to make decisions and when they were unpopular,the public was left with little recourse.In the case of MHM the lack of clear roles and re sponsibilities created an environmentwhere su b district commissioners failed to demand even the most ba sic financialinformation and their attorney was negligent in advising them of their authority orresponsibility. ZMD Commissioners were historically complacent in their oversight.

Mo Rev Code 184.354 and 184.358 in ambiguous in its definition of the responsibilitiesof both the ZMD and sub district commissioners. The Supreme Court case ZoologicalSubdistrict of the City and County of St.Louis v. Jordan, 521 SW.2d 369 (Mo.1975)provided additional guidance by limiting the authority of the ZMD commissioners tosetting th e t ax rate but not in volve itself in the day to day operations of the sub districts.

Subject to those restrictions these should be th e roles:ZMD - Mo Rev Code 184.354 defines the District board, appointment, terms,qualifications, officers, rules and bylaws. This institution should be our region's cu ltu ralleader. The ZMD needs to reinvent itself. It should no longer be a ceremonial rubberstamp of the budgets of the member institutions.


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The commissioners should want to advance and grow public support for the cu ltural inour region . They shall employ suc h re so urces as needed to hone a vis ion for the culturaldistrict and then build con sensus with its member in st itutions, local and sta telawmakers, civic and cu ltural leaders, and engage th e ge neral public to build that vision .They shou ld develop a miss ion statement, and a bu siness plan for implementing it. Theyshould consider issues like: the role oftour ism, what should be free to the taxpayer,and who should ge t in free .Understanding that re so urces are limited and this future growth ca n be st beacco mpli shed by being an advocate of th e taxpayer. The ZMD should challenge the subdistricts to deliver value and demonstr ate that they are worthy of public funding. Whilethe member institut ions may alrea dy be benchmarking their performance, the ZMDshould have the staff and resources necessa ry to independent ly evaluate the subdistricts performance and work close ly wi th the in stitutions in estab lishingexpectations. Should the need arise the ZMD should be willing to se t tax rates ba sed onthat performance and not on the arb it rary limits set by state statutes.Since success of this structure is ultimately depen dent upon th e cooperation of thein st itutions, the leaders of th e ZMD shou ld be th e co nfid ence and trust of th e memb erin st itutions, but also know the be st way to grow th e cultural district is to del iver value totax payer and since they are publicly ap pointed they should pledge an oath of advocacyfor the taxpayer.Sub district commissioners: - Mo Rev Code 184.358 defines how su b districts aregoverned by co mmission, ap pointment qualifications, terms, remova l from office,nonvoting advisory members, appointment and terms. Are the most dese rving trusteeswho have demonstrated support and leadership at the in st itution they arerepresent in g? Since th ey are publicly appointed th eir oath should reflect their mixedalleg iances to the cu ltural in stitution and t axpaying public. Th ey should be advocatesfor th e organi za tion that th ey are appointed to oversee and work wit h trustees andad ministrators at thei r respective institutions to position their institution in a favorab lelight and deserving of ZMD fund ing and the public trust, by assuring they are goodstewards of the publi c money. They should understand th e ZMD s vision and work tome ld th at vision with th eir institutions. They should se t th e budget and ha ve fin alauthority over all expenditures. In a timeframe that is both order ly and re spectful ofthe vo lunteer trustees and sub district commissioners, the MOBOT and th e MHM shouldtran sition to this mod el. A recurring th eme in the report from the Circuit Attorney wasproblems ca used by multiple boards.


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Trustees: Are benefactors or volunteers of the institution who have earned theprivilege through their past contribution. They are advocates of the institution and areun conflicted in their support of it. They understand the unique nature ofthe publicprivate partnership and responsibilities of an institution that come with accepting publicmoney, and are free to decide not to accept the funding.local Elected Officia ls: The Mayor, County Executive, Board of Aldermen, CountyCouncil, and others if district is expanded geographically-should be solicited by theZMD to demonstrate local suppor t of the ZMD s vision, mission, business plan,expansion and code of operation.State Officials: should be solicited by the ZMD to amend state law where necessary andwork to fulfill the ZMD vision by demonstrating that they have engaged the public toform the vision, have institutional support of trustee and sub district commissioners andearned the support of local elected officials.

II. Develop a Regional PlanThere is no long range, coherent plan for growing and expanding public support ofcultural institutions in our region. No person or organization is considering theeconomic impact it is having on tourism nor to what extent free admission serves as aloss leader for tourism that in turn , through tourist taxes, help pay for this wonderfulpublic benefit. No organization is measuring the impact it is having on the quality of ourlives, no one is planning for when or how to expand the district to include otherinstitutions. There is no clear policy establishing who to charge and in what instancescharging is appropriate. It is ok to charge at the Missouri Botanical Garden, specialexhibits and attractions, for parking but anyone can get in free? There is no long rangeplan for admitting future institutions or expanding the district to other county or states.This is a jumble of complex issues that deserves consideration.

III Performance and AccountabilityThe state statutes Mo ev Code 184.350-384 and voter referendums that approvedthe ZMD taxes require that they be dedicated to each institution individually. Sincethese are dedicated taxes, the ZMD may not shift money from one underperformingorganization to another more deserving, but the statute places the respon sibility ofsetting the tax rate on the ZMD. Hence, they are the de f cto guardian of the taxpayer.

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The ZMD ha s always se t the ta x rate at the hi ghest level permitted by st atute, anarbitrary number that does not consider either the nee d of the inst itution or the va lueto the public. The pitch to the public ha s always been to pay the ta x and get freeadmittance. After decades without minimum expectations and arb it rarily funding thein stitutions at maximum rates, the result is radica lly different costs of free admission.

Botanical Garden Zoo istory Museum Science CenterTotal attendance 935,224 3,015,543 286,913 1,200,072Total expenses 44,390, 189 .00 50,034,73 2.00 13,204,196.00 19,600,548.00Cost per attendee 47.46 16.59 46.02 16.33Tax su pport 9,816,667.00 20,010,596.00 9,746,999.00 9,955,876.00Tax subsidy pe rattendee 1050 6.64 33.97 8.30% of cost borne ypublic 22. 11% 39.99% 73.82% 50.79%

All fi gures are th e average for the t hree-year period 2007- 2009 and are se l f reported.Th e Scienc e Center ha s subseq uen tly revised their attendance figures down. TheGarden does not have free admission and is permitted to charge a fee. This table doesnot consider that fee.

The ZMD should establish District Policies which out line policies & standard s withrega rd to performance, compensation & benefits ethics, and other topics deemedpertinent by the ZMD.

A. Performance

This committee recognizes that collectively the in stitutions have great ly magnified thepublic contribution by private contr ibutions, but it pre sently has no position on th e leve lfunding for the in stitutions becau se the ZMD has made no effort to develop or gatherquantifiable data to ju stify any level of funding and has always simply set the yearly taxrate as the maximum

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rt seum

415,51029, 195,977.00

70.2720,224,876.00

48.6769.27%


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1 The success of these public private partnerships is dependent upon benefactorsmaking gifts with the understanding that their gift will not replace publicfunding. This pact needs to preserved and protected, but balanced against thepossibility that an in stitution may at so me point lack the support of privatecontributors, or no longer engage the public in a meaningful way.

2. Funding should be tied to minimum performance levels and not to the maximumauthorized by the voters. The ZMD should work with its member institutions todevelop meaningful and mutually agreeable benchmarks to meas ureperformance against comparable organizations with similar purposes. Items toconsider should at least in cl ude: public cost of admission, community outreachand education, and demonstrated private financial support. The ZMD shouldindependently employ such resources as necessa ry to measure and track theperformance of its member institutions.

B. Compensation & Benefits1 The ZMD should consider establishing caps on sa laries th at will be supported bytax dollars, but should permit its member institutions to compensate staff at higherlevels if it deems it appropriate and necessary provided it:

a. Rai ses th e amount above the cap from private so urces that are knowinglyco ntributing to a co mpensation fund . This might be accomplished throughdisclosure in attributes of membership or giving level (i.e . 10% of your gift goes toendowing our leadership fund for th e sa laries of our staff)

b. Th e compensation is es tablished consistent with procedures and processeses tablished by th e ZMD to assure objectivity and independen ce from conflict ofin tere sts.

c EthicsDespite the MHM being in clear violation of the ZMD's code of ethics and undercriminal investigation, the ZMD not only chose to fully fund the MHM, but declinedto delay the funding until th e investigation and thi s report was completed. Thiseffectively rendered section 2.5 of their code of ethics exhibit C ) as meaninglessand need s to change.1 The ZMD s Code of Ethi cs needs to be updated and inco rporated in their fundingagreement and enforced.

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2. All publicly appointed positions on the ZMD or sub district boards shou ld be administeredan oath that reflects their duties and responsibilities as outlined above.3. Commissioners and Trustees must receive training on responsibilities of serv ing on theboard.4. All entities of each sub district shou ld be subject to the Sunshine Law so alltransactions are transparent .

IVReport to the CommunityEach year the ZMD should prepare an annua l report for the public that summarizesand updates the items discussed in items I, II, and III above. Special emphasis shouldbe pla ced on demonstrating the leveraging of public funds with private partners andbenchmarking the performance of its member institutions. Each year the reportshou ld be presented at a comm it tee meeting of the appropriate committees of theSt. Louis Board of Aldermen, St. Louis County Council, and Missouri State Legislature,as well as made ava ilable to the media and general public. Add itiona lly a summaryof cost of admission data should be posted at each public entrance of all memberinstitutions under the heading of your tax dollars at work , and shou ld include atleast the fo llowing: Average Cost of Admission, Average Public Cost of Admission,Average Private Subsidy per Admission, an appropriate Benchmark Cost ofAdmission, where to find additional information about the ZMD, and the names ofthe County Executive, Mayor, and ZMD commissioners.V Response to this ReportThe Board of Aldermen respectfully request that the ZMD respond at a meeting ofthis committee to be held within 90 days.

roddy report

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