City of Johnson City’s country club membership called into question

JOHNSON CITY, TN (WJHL) – The City of Johnson City’s taxpayer-funded membership to the exclusive Johnson City Country Club is now prompting concerns about what, if any, benefit the public is getting out of it.

The Tennessee Comptroller of the Treasury expressed concerns to Johnson City’s auditors after our Community Watchdog investigation identified the expense during a review of the city’s check register. A spokesperson for TCOT said the state does not think any other city manager in Tennessee receives this kind of benefit and added the agency doesn’t think the membership provides any benefit to the community.

“We have reached out to the auditor for some more information about the membership,” TCOT spokesperson John Dunn said. “We’ve also provided what we believe is our point of view that this is a questionable expenditure that may not meet the definition of a lawful municipal purpose.”

Dunn said a city could argue there’s a community benefit if a country club membership is used solely for economic development, but Johnson City’s city manager doesn’t dispute that he uses the country club for personal reasons too. The membership, which leaders say dates back at least 35 years, is in the city’s name, according to a city spokesperson.

“The lawful municipal purpose is for economic development, business relations, and business growth and retention,” Johnson City spokesperson Keisha Shoun said. “(The city manager) primarily uses the country club as a dining and/or meeting location and always personally pays for all costs incurred beyond the membership charges.”

According to the Johnson City Country Club’s website, a general membership costs $335 plus tax a month and requires a food and drink a minimum of $50 per month. The membership offers the city manager and his family “use of all facilities and privileges.”

Led by then-Mayor Steve Darden, Jane Myron and future Congressman Phil Roe, a former Johnson City Commission approved City Manager Pete Peterson’s use of the city’s country club membership in late 2005.

“I think it’s a good package for him,” Mayor Darden, the negotiator, said during a December 2005 City Commission meeting. “I think it’s a good package for the city.”

“I’m satisfied with the contract as it is,” Dr. Roe said at the same meeting.

The commission narrowly approved Peterson’s contract, which included the benefit, by a vote of 3-2 and not without controversy.

“It just doesn’t seem right to me,” Dr. Ricky Mohon said at the time. “If he wants to be a member of a country club, I think we pay him a salary that will allow him to do that.”

Like Dr. Mohon, Pete Paduch also made it clear he would not support the expense.

“The country club membership, I’m totally against that,” Paduch said during the meeting.

Almost 12 years later, Paduch still thinks he’s on the right side of history.

“That’s not what you do with the public’s money,” he said. “It’s just ridiculous of how they spend the taxpayers’ money. It falls back onto, not Peterson. If you want to give me something for free, I guess I’d take it. It falls back on those commissioners that are good at handing out the public’s money.”

Mayor David Tomita says the city has kept the membership for decades.

“I knew we had a membership, yes,” Mayor Tomita said. “Just because it’s not common doesn’t mean it’s not proper.”

While the monthly expense may seem minimal, the cost of the membership over time adds up to roughly $50,000 during Peterson’s time as city manager alone.

“Do you personally think it’s a wise use of taxpayers’ money?” we asked Mayor Tomita.

“I’ll have to see how it’s been utilized,” he responded. “I don’t see it being outside of normal use of business and economic development. I think it’s something very, very, very common and very acceptable for economic development purposes.”

Under Tennessee law, every government expense must have a lawful municipal purpose.

“My recollection is that the membership is the City’s and thus is generally available for things like meals and meetings regarding City matters,” Darden said when contacted by email. “It’s curious to me that the State has raised the issue now, 12 years post-2005. In fact, I assume that prior managers’ contracts (West and Campbell) had the same provision. I may not have stated it at the time, but given the proximity of the Country Club to City Hall, the manager could hold staff meetings/meals, meet with prospects for economic development over breakfast or lunch, etc. and do so productively and efficiently while minimizing interruptions.”

We asked the city the last time the city manager used the country club for business reasons.

“Mr. Peterson does not keep track of business events or meetings held at any specific location and therefore cannot say with certainty when the last one of that nature took place at the Country Club,” Shoun said

“It does not get used often, if not at all in my recollection,” Mayor Tomita said.

Mayor Tomita told us while he and the city’s auditors are comfortable with the membership, city leaders will now discuss the issue further. The Johnson City Commission started the city manager’s annual review this week, which includes reviewing his compensation. The full commission meets again Thursday.

“If the Comptroller feels that warrants discussion and investigation, we’ll certainly do that,” the mayor said. “If there is something improper about it, it will not be done, plain and simple.”

Representatives of Kingsport and Bristol both say their city managers do not receive country club memberships.

Copyright WJHL 2017. All rights reserved.

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