Tag Archives: privitization

Out-of-state firm gets $60M contract to promote ‘Made in Tennessee’ campaign

NASHVILLE, Tenn. (AP) — Tennessee officials have signed a five-year, $60 million contract with a Kansas City, Missouri firm to produce the “Made in Tennessee” tourism campaign.

The marketing agency VML, which has opened a Nashville office, produced two 30-second TV commercials promoting getting outdoors in Tennessee. The ads feature with dramatic waterfalls, green rolling hills and horseback-riding amid a forest scene. The ads will play in about a dozen markets around the country.

The head of the state’s tourism department, Susan Whitaker, told WPLN-FM in Nashville (http://bit.ly/1pzZ6VM ) at a time when other states are investing heavily in tourism promotion, Tennessee needs to keep up. Whitaker also cited ABC’s “Nashville” as sparking new interest in visiting the city. VML’s ad campaign is aimed at turning that interest into a visit.

Governor Bill Haslam’s current budget included a nearly $11 million tourism budget, $6 million of which is being dedicated to the VML contract. It’s a 5-year agreement, and the firm’s total maximum payout is $60 million, though that doesn’t guarantee that’s what the company will be paid.

Whitaker said publicly-financed advertising yields big turns. For every taxpayer dollar invested, around $19 are sunk back into local and state coffers, she said.

Whitaker said if tourism efforts continue to receive strong funding, they’ll be able to hit their goal of making it into the top 10 states for tourism. Right now, in terms of revenue, Tennessee is ranked 17th.

“Part of the reason for that, and I don’t broadcast this to people when they come, is that we have a very high sales tax,” she said.

JLL reshuffling moves TN Lottery out of building, then moves DCS in

In another report on the state’s contract with Jones Lang LaSalle, Phil Williams enlicits commentary from state Rep. Sherry Jones, D-Nashville, on some of the shifting around of state employees as recommended by the company.

Take, for example, JLL’s recommendation that the state demolish the Cordell Hull state office building and sell off four other state buildings.

The company not only got paid for that advice, but the State Building Commission has already approved commissions of $2.7 million for JLL to negotiate just five leases for new space.

On top of that, invoices show that the Haslam administration agreed to pay JLL another $1 million dollars to supervise the decommissioning of the state buildings.
And when state employees are moved, JLL also gets paid to supervise that process, as well.

…But the best example of the potential conflict may be a building in MetroCenter.

JLL got paid to advise the Tennessee Lottery to move out.

Then, the company got paid to advise the Department of Children Services to move in to the very same building.

Part of the concerns that JLL voiced to the Lottery was the building’s “mechanical and electrical systems,” a less efficient “floor plate design” and “the risk of another flood such as MetroCenter has experienced” before.

Children’s Services is moving out of the Cordell Hull.

“With all of the problems that DCS has and continues to have, we’re going to move them into a building that’s not efficient enough for the Lottery to work in, but it’s gonna be okay for DCS,” Jones said.

And one of the buildings where JLL took the Attorney General’s Office for a tour, the Fifth Third Building at 5th and Church, is leased and managed by JLL itself.
The Attorney General’s Office is also scheduled to move out of the Cordell Hull.

“This is totally ridiculous,” Jones said.

…JLL said, in a statement, that state officials make the final decisions — and that these questions about a potential conflict of interest disregard the company’s own projections that it will ultimately save the state “tens of millions of dollars.”

Mike McWherter: Haslam has created a ‘culture of corruption’

Mike McWherter, the 2010 Democratic nominee for governor who lost to Republican Bill Haslam, told Roane County Democrats last weekend that he’s not running against Haslam in his bid for reelection next year. But he blasted the incumbent for creating a “culture of corruption” within state government.

In the speech, McWherter links the federal investigation of Haslam-family-controlled Pilot Flying J and the seven guilty pleas by its former employees to “corporate fraud” charges with the Haslam administration’s approval of a trio of contracts with companies having some sort of tie to administration officials.

McWherter, currently a member of the TVA board of directors, harkens back to things he said in the 2010 campaign – deploring, for example, Pilot “price gouging,” which was depicted by Haslam then as basically honest mistakes, long since corrected – as exemplifying “a culture of corruption which management, at the very best, allowed.”

The federal investigation, he says, shows more of the same is afoot in the company.

“Now this same culture of corruption is invading state government at its highest level,” McWherter said in his prepared remarks,

Here’s the text of McWherter’s speech as provided after an inquiry (with editing in the form of inserting paragraph marks and correcting what seemed a typographical error):
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Legislators not told comptroller asked re-bid of JLL contract

An official with the state comptroller’s office suggested in an email that Gov. Bill Haslam’s administration should scrap a portion of a state contract with Jones Lang LaSalle and put it back up for competitive bidding, reports WTVF.

Reporter Phil Williams says the email indicates administration officials may not have told state legislators “the whole truth” during a hearing before the Fiscal Review Committee on the Jones Lang LaSalle contract to manage state government buildings.

They were asked point-blank if contract watchdogs from the state Comptroller’s Office had raised any concerns.

“Did the Comptroller’s Office have any comment on the way it was being done as it moved along?” asked state Sen. Douglas Henry Jr., D-Nashville.

Department of General Services lawyer Chloe Shafer responded that the comptroller’s staff had provided “feedback.”

“They asked for information about what we had looked at, just as you did… and we provided them with answers that we believe they found satisfactory,” Shafer told Henry.

But what the General Services lawyer did not tell the committee was that she had received emails from the Comptroller’s Office just two months earlier, urging that a portion of one of those contracts be scrapped.

That portion lets JLL handle lease negotiations for the state and ask for a 4 percent commission from landlords who want to lease the state a building.

“This was negotiated with JLL with no opportunity for anyone else to offer their services,” wrote Melinda Parton, director of the comptroller’s Office of Management Services.

“Don’t agree with continuing to negotiate services without competition,” she concluded.

…(W)hen lawmakers gathered to review that contract, they only heard the administration’s side. That’s because the Comptroller’s Office is now in the middle of the a big audit of the Department of General Services — and they weren’t ready to talk about their findings.

Haslam Looking to More Privatizing

Despite a controversy over his outsourcing of state building operations, Republican Gov. Bill Haslam says he intends to continue privatizing state government operations where he believes it is practical, reports the Chattanooga TFP.
“I think our job is to deliver the very best service at the lowest price, and I’ve said that from the very beginning,” Haslam said last week, adding, “I think particularly this case with the real estate space is a great example of that.”
Haslam was referring to a contract with Chicago-based real estate services firm Jones Lang LaSalle to manage state office space.
…State employees and their representatives, meanwhile, argue that in at least some outsourcing ventures, the promised savings don’t materialize.
“As far as I know, state employees were doing a good job managing the buildings,” said Robert O’Connell, executive director of the Tennessee State Employees Association.
What employees “think we’re seeing here is an execution of a certain political philosophy” of privatization wherever possible of even “appropriate” public functions, O’Connell said.
Haslam said outsourcing state functions where it makes sense is one of several strategies his administration is using to keep government costs down.
“Right now we’re in a good revenue period, and the revenue’s always exceeding [estimates],” he said. “That doesn’t always last. When it doesn’t, we’re going to have to provide for that. This is a direct result of the top-to-bottom [reviews of state functions]” Haslam ordered after taking office.
The reviews have resulted in any number of cost-cutting measures and elimination of some state services.
Haslam argues the reviews don’t always lead to trimmed or eliminated programs, job cuts or privatization.
“There’s other things we’re taking back” from private vendors, Haslam said.
“I was talking to a highway contractor the other day who’s kind of mad about some things we used to let private contractors do that we’re bringing back in house” at the Department of Transportation.