Shining the light on Johnson City Power Board's donation

Johnson City Press • May 19, 2014 at 10:14 AM

The Johnson City Power Board voted in 2006 to make a $500,000 donation to help establish a new pharmacy school at East Tennessee State University. That contribution immediately came under fire by then-Johnson City Commissioner Pete Paduch, who argued the Power Board had violated its own charter by agreeing to contribute $50,000 annually to the project over a 10-year period.Tom McKee, the Power Board’s attorney, said the financial commitment to the pharmacy school was perfectly acceptable since it was not a charitable donation, but rather an investment in economic development. He and other supporters of the donation said the economic impact of the pharmacy school would benefit not only Johnson City and Washington County, but the entire Upstate region.Now, Power Board officials are making a similar argument in regard to a contribution the public utility has made to ETSU’s fine and performing arts center project. They say the $500,000 one-time contribution to the $38 million project will help drive economic development in the region.And Paduch is once again questioning the legality of a Power Board’s donation in the name of economic development. In a letter to Forum earlier this month, Paduch revealed he is one of several customers who have hired an attorney to contest the Power Board’s contribution to the performing arts center project.“We believe this doesn’t comply with Tennessee Valley Authority guidelines and is illegal,” Paduch wrote.He also noted, “TVA contribution guidelines state that contributions for art and culture are limited to in-kind contributions. Under TVA’s use of revenue guidelines, it also states that contributions be given in a de-minimus amount (so minor as to disregard). These guidelines clearly support our position.”We’d like to hear from you. Do you believe the Power Board’s decision to donate $500,000 to ETSU’s performing arts center is proper and will it indeed help generate economic development? Send your comments to Mailbag, P.O. Box 1717, Johnson City, TN 37605-1717, or mailbag@johnsoncitypress.com. Please include your name, telephone number and address for verification.

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