Attorney addresses HSMP contract

A court ruling that struck down payments from Little Rock and North Little Rock to their chambers of commerce should not affect the city's relationship with the Hot Springs Metro Partnership, Hot Springs City Attorney Brian Albright said Wednesday.

"They are separate entities, with separate tax ID numbers, a separate status as far as their 501 status goes," Albright said Wednesday.

"The money we give to the partnership, a public-private partnership, is purely for economic development. They keep that money segregated and do not commingle it with the chamber of commerce's money," he said.

Pulaski County Circuit Judge Mackie Pierce has ruled that Little Rock and North Little Rock must stop paying their chambers of commerce and other economic development entities because the payments violate the Arkansas Constitution. Several cities across the state with similar situations are awaiting a written ruling before they decide if they should change the way they make contributions.

The city has provided funding to the Hot Springs Metro Partnership, formerly the Garland County Economic Development Corporation, for a number of years. The current city budget provides funding in the amount of $100,000 for the HSMP and $12,500 for the retirement relocation program.

Albright said one of the main differences between The Greater Hot Springs Chamber of Commerce and the HSMP is that the chamber engages in some political activities and the partnership doesn't.

"It's one of those things where the city can hire some entity to do the kinds of things the city is authorized to do, but chooses to hire someone else to do it, such as the Hot Springs Advertising and Promotion Commission hiring a publishing company or advertising firm to help, instead of doing the work in-house, and that is OK," he said.

A similar situation is the money the city contributes to the Boys & Girls Club of Hot Springs to provide a baseball program, instead of the city having the expense to build and maintain baseball fields.

"Hot Springs can do economic development work, but instead of paying a salary and having employee expenses, we contribute to the partnership's efforts, and in turn, they have a contract with us regarding the services they provide," Albright said.

"I think our situation is different primarily because they are separate entities with separate tax ID numbers, and separate funds," he said.

Jim Fram, CEO and president of The Greater Hot Springs Chamber of Commerce and the Hot Springs Metro Partnership, said Wednesday that the HSMP does not participate in any governmental activities or lobbying.

"All that is done through the chamber," he said.

"I think we are structured like a lot of organizations in Arkansas and that is the partnership is a completely separate corporation with a separate set of bylaws, board of directors, and financials. We have a full audit done every year. We operate very transparently and very public because it is a public-private partnership.

"I've met with the city and county attorneys and feel pretty good about where we are. We are structured far differently than the Little Rock and North Little Rock chambers," he said.

Fram said the HSMP has a contract with the city that spells out the "deliverables," where certain services or goods are provided for a certain fee.

"We report on a regular basis to the city as to what we're doing with those dollars. We even go so far as to keep the funds in a separate bank account from the funds we get from private companies and individuals," he said.

He said the retirement relocation program was previously a chamber program, but when he became president of the chamber, it was moved under the umbrella of the HSMP.

"Because it's a very small organization, we share some staff with the chamber but the payroll is all done through the chamber and then the partnership is billed for exactly what those numbers are. That is the only way we're connected, and that is just a transactional relationship," he said.

Local on 01/15/2015

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