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Attorney questions Power Board's $500K donation

March 31st, 2014 9:48 pm by Gary B. Gray

Attorney questions Power Board's $500K donation

Elizabethton Attorney Jerome Cochran is inquiring about the Johnson City Power Board’s $500,000 donation to East Tennessee State University and its intended use of aiding construction of the new performing arts center.

In a March 20 letter to JCPB CEO Jeff Dykes, Cochran said he is representing several customers who have asked him to examine the money approved by the utility’s board of directors.

“These customers have asked that I attempt to get answers regarding the circumstances that led to the approval of this donation and whether it is consistent with the stated mission of the (Tennessee Valley Authority) or does it violate any federal law, state law, or TVA guidelines or regulations.”

In late October, the board of directors voted unanimously to approve a recommendation from Dykes to commit the money from the JCPB’s underground/economic development fund, saying the donation would help drive economic development in the region.

At that time, Board of Directors Chairwoman and City Commissioner Jenny Brock said the move was good business for the utility and citizens in the community: “The minute they open their doors, people are going to be in town spending their money, restaurants will be popping up, which means new customers for us, so I think this is one of those projects we look at and say, ‘Does this fit our mandate from the TVA for us to become involved in it?’ ”

That, says Cochran, is what his clients want to know.

After reviewing TVA’s Corporate Contribution Guidelines, the attorney wrote the following to Dykes: “It states that, ‘TVA will consider requests related to the areas of health and arts and culture. Contributions in these areas will be limited, with emphasis placed on in-kind services.’ ”

Cochran said the guidelines also state that contributions be given in a “de minimus” (Latin for minimal things).

“My clients support ETSU’s Performing Arts Center, as well as their fundraising efforts, and believe it to be a noble cause,” Cochran wrote. “However, they do have concerns with the legality of the gift and believe that any gift of this size deserves careful scrutiny and review.”

Dykes told city commissioners after the announcement that the money would go toward the purchase and installation of energy systems at the center.

On March 25, Dykes emailed Cochran, confirming receipt of the inquiry.

“To allow Johnson City Power Board to follow proper procedure to reply to the request can you submit the attached FM-108 (Freedom of Information Act) form for our files,” Dykes wrote. “You can reference your letter in the request as the information requested. Due the amount of information requested covering a period from 2010 to present there will be a cost associated to compile the information. We are putting together an estimate of this cost for your approval.”

Cochran has asked for the following information:

• The identification of the TVA representative consulted prior to the donation.

• All written documentation or emails regarding the donation’s request and approval.

• Information regarding the JCPB’s ability to donate money to help construct ETSU’s new football stadium.

• An itemized list of all organizations the JCPB donated or gifted to from January 2010 to the present.

• A year-end balance and list of itemized expenditures in the underground construction fund for the years 2010-2013.

• Itemized list of expenditures in the economic development fund for the same years.

• Reason for mingling underground construction and economic development funds.

• Examples where other TVA-affiliated electric systems made similar donations.

• Whether funds committed to the new center are derived from ratepayers.

n Whether the JCPB has the authority to return the $500,000 to ratepayers instead of making the donation.

n Information about additional funds to be donated to the center. 

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