CLARKSVILLE, Tenn. (CLARKSVILLENOW) – There is a pending ordinance currently before the City Council as sponsored by Councilman Tim Chandler and supported by Mayor Kim McMillan, which states: “Passage of the ordinance would simply disconnect TRC (Two Rivers Company, Inc.) from the city government and rescind its status as a municipal district management corporation”.

The ramification of this ordinance is another effort by Mayor Kim McMillan to diminish the authority of TRC, a legal entity that was duly established under Tennessee statutes.

RELATED Mayor McMillan supports measure to change status of Two Rivers Company

Mayor McMillan, who since becoming mayor has been a member of TRC’s Board of Directors, made three allegations against TRC in her recent press release issued on Thursday. Aug. 31,

• TRC is not complying with budgeting provisions outlined in the state statute, which requires it to submit an annual budget for review and approval by the (City Council).
• TRC is operating without accountability to city government, which could result in obligating city taxpayers for contracts and other actions not controlled by duly elected city leaders.
• Current activity of (TRC) contradicts the principle of ‘self-financing’ outlined in the state statute enabling the creation of such district management corporations. TRC doesn’t levy a special assessment on district properties, yet it is using general tax dollars derived from city and county government budgets to fund special services for a specific district, which is in conflict with its foundational state law.

As President of the TRC, I have a duty to respond to the allegations asserted against TRC, particularly allegations by a voting member of TRC’s Board of Directors who has a fiduciary duty to act in good faith and in the best interest of TRC. This is important because Mayor McMillan cannot participate in discussion or vote on Councilman Chandler’s ordinance without breaching that fiduciary duty she has as a TRC director.

Before addressing the allegations, a review of TRC’s history is necessary. TRC was established via the April 13, 1999 City Ordinance [#41-1998-99], which created the “Clarksville Central Improvement and Redevelopment District,” a defined geographical area in downtown Clarksville. This action was taken by the City Council in the wake of a 1999 F-3 tornado that wreaked devastation within Clarksville’s Downtown District. This City of Clarksville action was critical because it was clear the Downtown District would need long-term leadership, focus and expertise to elevate and protect the district’s economic viability along with the district’s history, culture and livability. The ability of the Downtown District to ultimately become a positive contributor to the tax base of the City and County was also imperative. The 1999 ordinance authorized the creation of a Tennessee Nonprofit Corporation to manage the District by administering the activities for and within the District, the making of improvements within and for the District, and the provision of services within and for the District, i.e. a district management corporation. The nonprofit corporation was incorporated by attorney Richard H. Batson on April 15, 1999, under the name of “Clarksville CBID Management Corporation of 1999,” which now operates under the name of Two Rivers Company Inc. of Clarksville-Montgomery County, TN, acronym being “TRC.”

The 1999 ordinance specifically provided that TRC “shall be governed by a board of directors.” The initial 11 voting directors of TRC’s Board of Directors were defined by the 1999 ordinance. In addition to the 11 voting directors, the 1999 ordinance identified four non-voting ex-officio directors; the City Mayor, Montgomery County Chief Executive, Chairman of Clarksville-Montgomery County Economic Development Council and the president of Austin Peay State University.

The initial Bylaws of TRC, in compliance with the 1999 ordinance, included the ordinance’s board of directors’ provision. The bylaws also provided that all vacancies on the board of directors would be filled by the City Council based upon recommendation of the City Mayor. A consequence of this provision resulted in TRC being deemed a “component unit” of the City for external financial report accounting purposes, because of the City’s control over the majority of the TRC Board of Directors.

The initial TRC bylaws provision defining the members of the board of directors was amended July 23, 2015, to be in compliance with the 2015 Ordinance [#60-2014-15]. The amended Bylaws provides for 13 voting members of TRC’s Board of Directors, being: City Mayor and four of her appointees, County Mayor plus four of his appointees, one mutual director appointment jointly by the City and County Mayor, Executive Director of the Clarksville-Montgomery County Economic Development Council and the President of Austin Peay State University. In addition, the amended Bylaws defined 11 ex-officio non-voting directors. A consequence of this provision was the Comptroller of the Treasury for the State of Tennessee concluded that for external financial report accounting purposes, the City and County would report TRC as a joint venture, because of the City and County’s joint control over the majority of the TRC Board of Directors.

TRC is a nonprofit corporation governed by the nonprofit corporate laws. By ordinance, TRC was granted certain general powers for administering the activities for and within the District, the making of improvements within and for the District, and the provision of services within and for the District, together with very specifically listed powers, given as an endnote below . TRC is not, nor has it ever been, a “municipal district management corporation” under state statutes. The Mayor’s press release relies upon the assertion of TRC as being a “municipal district management corporation” in order to make allegations adverse to TRC because the 1999 Ordinance does not include the requirements of T.C.A. § 7-84-517(3)-(6) which inclusion is required to make TRC a “municipal district management corporation” under state statutes. Two Rivers Company is and has always been a nonprofit corporation whose business has been management of the District following the guidance of both City and County. That management authority was granted to TRC by the 1999 ordinance. The critical distinction is that TRC is a non-profit corporation governed by a board of directors operating under the laws of the State of Tennessee, and not a municipal district management corporation.

Two Rivers Company’s time and efforts will be better spent if we continue to focus on redevelopment in our downtown and riverfront rather than wasting our energy and resources and those of the City Council in petty squabbling over TRC’s formation and operation. The success of those redevelopment efforts is clearly evident in the form of the Civic Plaza now under construction and the intense interest of developers in surrounding properties as a result of that project. That success is demonstrated by the fact that 21 downtown properties have changed ownership in the last 16 months at a value of over $8 million, which does not include the investment in improvements of those properties. The result of economic revitalization is that City and County governments will both enjoy increased tax revenues as opposed to a deteriorating tax base.
What TRC is doing is clearly working. In the interest of the citizens of Clarksville and Montgomery County, there is simply no valid reason or benefit of “disconnecting” Two Rivers Company from either the City or County governments.

Charles Foust, Jr.
President
Two Rivers Company