Hazlehurst’s Blog
Insight and commentary from John Hazlehurst

Reports of Newspaper demise not greatly exaggerated

It’s too bad that we can’t say of daily newspapers, as Mark Twain once quipped, that the reports of their demise have been greatly exaggerated.

In the last couple of weeks, the industry has continued to shrink both workforce and product.  The New York Times radically reduced the size of its iconic Sunday Times magazine, which now resembles a department store insert - only with fewer ads.

This morning, Freedom Communications, which owns scores of media properties, including The Gazette, announced across-the-board salary reductions of 5 percent.

Will the industry recover?  Can print media, so beloved by the 50-plus demographic, endure, recover, and thrive?  Or will the entire news and information business move to the Web?

The answer’s pretty obvious. Print is only hanging on because baby boomers-and their parents - are living longer.  Every year, the grim reaper puts the kibosh on hundreds of thousands of folks who otherwise would have renewed their subscriptions to their friendly metro daily, hastening the day of print’s demise.

When that day comes - whether in two, five, or ten years, the business will change dramatically. 

Metro dailies were, for decades, great businesses. That’s because they had effective advertising platforms, and usually enjoyed local monopolies. The cost of creating and operating a daily was so prohibitive that potential rivals either merged or went out of business. The chains that owned monopoly dailies never poached on the territory of other chains - why bother to risk losses?

For the moment, daily newspaper Web sites dominate their markets - but that may not last.

Their web dominance is a result of information subsidy, from the built-in advantage of the powerful editorial and sales staffs that man the print editions. Absent print, online revenue won’t be enough to maintain the workforce, and the cost of entry will drop precipitously.

Some metros will make the transition - and some, buried under top-heavy corporate structures and legacy debt, will founder. New market entrants will strive for local dominance, and some will realize their goals. 

Other markets may fragment, with no dominant news and information provider.  And others, particularly in the sunny climes favored by retirees, may still cling to print.

Listen, sonny boy, if it was good enough for Grandpa, it’s good enough for me!  And where else am I going to get the obits…?

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Posted by John Hazlehurst on June 30th, 2009 :: Filed under Blog
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No ‘poena’ in subpoena

Last Friday, the Colorado Springs Independent Ethics Commission asked Central Bancorp CEO Ron Johnson to provide a list of all individuals whom he believes possess relevant information about the conflict of interest allegations that Johnson has made concerning Mayor Lionel Rivera.

In a reply dated June 19, consisting of 15 rambling pages of often-turgid prose, Johnson’s attorney, Lindsay Fischer, lists Rivera, LandCo CEO Ray Marshall, recused Ethics Commission member Jan Doran, Councilman Jerry Heimlicher, Vice Mayor Larry Small, Ward Berlin (an investor in a Marshall-controlled LLC), Jack Mason (as Mason Properties, an investor in a Marshall-related LLC), the board members of the Downtown Development Authority, “media persons” (including yours truly), the manager of the “local UBS office,” Jim Scherr (former head of the USOC), “Ms. (Stephanie) Streeter, the current head of the USOC,” Marshall attorney John Cook, and “any other person who does not come to mind at this time.”

Fischer notes that both Mason and Berlin are under “gag orders” arising from their agreement to confidential settlements of lawsuits involving Marshall, LandCo and certain LLCs. Because of these agreements, neither man could legally disclose any of the “relevant” information that Fischer believes they possess, absent a subpoena by the Ethics Commission.

The word “subpoena” has a certain awful gravity about it. Translated from the latin, the word means “under penalty.” One assumes that, if an entity has the power of subpoena, any failure to comply carries unpleasant consequences — like being jailed for contempt of court, or fined or hauled willy-nilly to the courthouse and forced to testify.

That might be true of a grand jury subpoena, or one from a court of appropriate jurisdiction.

But even a cursory reading of the ordinance establishing the Independent Ethics Commission reveals it to be a panel with neither bark nor bite.

The commission has “jurisdictional authority” only over members of City Council, city employees and appointees to various city boards and commissions. It can, in theory, require that persons belonging to any of those classes appear before the commission.

It can ask anyone else to appear, and can even issue subpoenas.

But here’s some “free legal advice”: If you don’t want to show up, don’t bother, subpoena or not.

That’s because there’s no “poena” in the subpoena. The ordinance prescribes no penalty for failure to appear. All the commission can do to scofflaws is to say “tut-tut, dear fellows — how terribly unsporting of you to decline our kind invitation!” The commission is a cat without claws, a pit bull without teeth, a rattlesnake without fangs.

It’s as if council passed an ordinance empowering the city to set speed limits, but neglected to include any penalties for speeding.

In that happy state, some of us would speed, some would slow down and some would obey the limits anyhow.

But in the event that the commission, in all of its august majesty, issues subpoenas, some recipients might be ready, even eager, to comply — while and others will politely (or impolitely) decline.

We’ll see — or, since the commission has decided to close its proceedings, maybe we won’t.

Our very own Star Chamber — albeit one which is utterly powerless.

And by the way, don’t interpret my ramblings as legal advice. Don’t want to get subpoenaed for impersonating a lawyer …

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Posted by John Hazlehurst on June 25th, 2009 :: Filed under Blog
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Justice balks, UBS walks

This morning the New York Times reported that the Justice Department may drop a closely watched legal case aimed at forcing the Swiss bank UBS to divulge the names of 52,000 wealthy American clients suspected of offshore tax evasion, a United States official briefed on the matter said Monday.

The move, which would halt an unusually aggressive effort to force Switzerland to lift its veil of banking secrecy, could happen by mid-July.”

During February, the Times reported, the Justice Department sued UBS in federal court, seeking to compel the bank to turn over the names. The move came a day after UBS agreed to pay the government $780 million to settle accusations that it had defrauded the IRS by allowing wealthy Americans to hide billions in secret offshore accounts.

But now the government has second thoughts. UBS says that disclosing client names would violate Swiss laws, and its executives might then be prosecuted by Swiss courts. And, UBS notes, they already paid off the Feds-so give us a break, will ya?

And, it appears, the Feds just don’t have the cojones to go after the fearsomely rich Swiss. As the Times reports:

“To have a complete meltdown in Swiss-U.S. relations and go to the mat with Switzerland three years from now when money is getting back into the system doesn’t make sense,” said an American official who was not authorized to speak publicly about the matter.”

UBS, and its officers, must respect client confidentiality. That comes first-and niggling little details, like potential conflicts of interest, or rich Americans scamming the IRS, come in a distant second.

Money talks - and everything else walks.

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Posted by John Hazlehurst on June 23rd, 2009 :: Filed under Blog
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The Pikes Peak region needs a slogan

The estimable folks who brought us the “Dream City” project are searching for a slogan.

Appealing to the public, they wrote that “The Pikes Peak region needs a slogan, words that suggest all the great reasons to visit or live here. As part of the community engagement project Dream City: Vision 2020, we’re collecting your ideas for inspiring slogans.”

Far be it from us to fall short community-engagement wise. We asked for suggestions. Here are a few, and yes, we know that they’re sadly inadequate! That why we’re asking you, dear readers, to submit your own suggestions, in the hope that we can, collectively and individually, come up with the single perfect phrase, or scrap of doggerel, or limerick, or haiku, that inspires, informs and amuses.

Here’s what we have so far:

“Pikes Peak and Busted.”

“Nobody shares our views!”

“Colorado Springs - where only the view matters!”

“Colorado Springs: South of Denver-and to the right of everything”

“Dobson, Haggard - need we say more?”

“Colorado Springs: Where not even Katherine Lee Bates stayed for long.”

“No springs in Colorado Springs!”

“Colorado Springs hits the spot/One 14′er, that’s a lot?/The USOC, and what a view/At least we’ll always have one of two!”

“Colorado Springs - once a city, now a suburb.”

“There once was a town near Pikes Peak/Whose founders large fortunes did seek/But soon they did find/That the town fell behind/And now its reputation is weak”

“Go west young man and claim your stake/To Colorado Springs-where everything’s fake/There you’ll find nature/And government failure/And a town that’s rarely awake.”

You get the idea.

Actually, the city already has a slogan-”We Create Community.” That little phrase was stolen from a bumper sticker created by Citizens Project during the late 1990’s, which read “Celebrate Diversity/Create Community.”

We have no quarrel with the city’s deft plagiarism - it’s better than paying a P.R. firm 20 grand or so to come up with a catchy phrase. The city’s various departments, “friends” groups, and divisions also have mission statements. Here’s our favorite, copied directly from the city website.

Mission Statement

City Contracting

“Business with a Competetive Edge”

Colorado Springs Utilities has its slogan as well - “It’s how we’re all connected.” El Paso County is without one.

But Denver’s slogan is simple and memorable -”The Mile-High City.” And just to rub it in, at least one city agency, the Denver Office of Cultural Affairs, has not only a mission statement (”To advance the arts and culture in the City and County of Denver”) but a vision statement (”To make Denver a community that attracts, cultivates, and mobilizes the creative spirit”).

Inspired by our neighbors to the north, how about “Colorado Springs-755 feet higher than a mile!” or “Colorado Springs - no mission, no vision, no slogan - and proud of it!”

Your turn.

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Posted by John Hazlehurst on June 19th, 2009 :: Filed under Uncategorized
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Ray Marshall (doesn’t) take the stand

Time/date: 8:30 a.m., Monday, June 14

Place: El Paso County Courthouse, Judge Ronald Crowder’s chambers

The event: The long-delayed trial of Case # 08CV3286, North County Land LLC et al v. Mason Investments III LLC et al.

Defendants and plaintiffs in attendance: Jack Mason and two lawyers. Ray Marshall, five lawyers, and a paralegal.

Interested observers in attendance: Linda Dix from the economic crimes unit of the DA’s office; several former investors in various of Marshall’s projects who have either been involved in lawsuits against him or are contemplating such action; Jack Mason’s parents; a journalist; and yet more lawyers.

To be decided: Mason alleged that Marshall, without his knowledge or approval, used $1.6 million belonging to North County Land as collateral for leveraged trading in securities at UBS, where he maintained personal and corporate accounts (managed, it appears, by Mayor Lionel Rivera). Dissatisfied with Marshall’s alleged failure to account for these transactions, Mason sued.

The original suit was settled, but, Mason alleged, Marshall failed to comply with the terms of the settlement - so Mason sued again. Marshall countersued. The suit was scheduled to come to trial on Feb. 20, but Marshall’s attorneys asked for a stay. The reason (verbatim from court documents): “Plaintiff Marshall motion for stay due to criminal allegations by Defendant Mason to DA-Granted …The FTR record of this proceeding ordered sealed pending further order of the court.”

The trial was scheduled for 8:30. Nothing happened. Judge Crowder was nowhere to be seen. Groups of lawyers wandered in and out of the courtroom, conferred in hallways, came back, left again. The attorneys had the satisfied mien of men who were each earning several hundred dollars an hour for standing around and waiting for something to happen.

Understanding nothing, I spotted an attorney of my acquaintance who happened to be passing by, and asked for his take.

“They’re gonna settle,” he said.

And how, I asked, did he know this?

He laughed.

“I’ve practiced law for a long time,” he said, “and I know how I’d advise a client in a similar position. (David) Isbell, (John) Cook - they’re as good as they come. They’ll do what they have to - but (Ken) Siegel (Mason’s attorney) is just as good. I’d love to be there when they close the doors, and hammer out a deal. Don’t bother to wait around - the terms will be confidential, and no one will talk.”

Sure enough, after another 15 minutes elapsed, we were all shooed out of the courtroom, the doors were closed, the judge ascended to the bench, and the parties made a deal. The terms of the settlement were not disclosed, and the court records thereof were sealed.

One last note: Before the doors were closed, Marshall spotted an investor in one of his projects, cornered her in the hallway, waved a piece of paper in her face and demanded that the investor sign it on the spot, and thereby settle their dispute.

She refused.

“He wanted me to sign something he’d drawn up, without showing it to my lawyer, without consulting anyone,” she said. “I couldn’t believe it - but I guess that’s just Ray.”

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Posted by John Hazlehurst on June 17th, 2009 :: Filed under Blog
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What the city charter has to say about initiatives, ethics and recall elections

The city charter is not exactly a pleasure to read.

Unlike the United States Constitution, its words were not composed by highly literate, profoundly intelligent men who were deeply conscious of the weight of history and who together deliberated at length over each phrase, each word and each article.

The Constitution was written by our founding fathers-the charter, by lawyers and politicians. Enough said.

Yet the charter makes interesting reading, especially as the Independent Ethics Commission investigates (or pretends to investigate) the mayor’s alleged ethical breaches.

Here are some salient sections.

“The Council shall be the judge of the election and qualification of its own members and of the grounds for the forfeiture of the office of Mayor or Councilmember subject to review by the courts in case of contest.”

So council may, upon the vote of a majority of its members, kick out the mayor or any other member of council, and let him/her sue for reinstatement.

“Any three (3) electors may commence recall, initiative, or referendum proceedings by filing with the City Clerk an affidavit stating they will constitute a Petitioner’s Committee and be responsible for circulating the petition and filing it in proper form, stating their names and addresses and specifying the address to which all notices to the Committee are to be sent, and setting out either:

(a) The name of the officer or officers sought to be removed and a general statement in not more than two hundred (200) words on the ground or grounds upon which removal is sought;

(i) For the recall of Mayor or a Councilmember at large, the petition must be signed by electors entitled to vote for a successor of the incumbent sought to be recalled and such signatures must be equal in number to at least twenty-five percent (25%) of the total ballots cast for the office of Mayor in the last preceding election for such office.”

It’s easy to take out a recall petition - but you’ve got to get a ton of signatures.

(1)  Recall . All petitions shall be returned and filed with the Clerk within sixty (60) days from the issuance of such blank petition forms. (1979; 1985)

And you have almost no time to do it, especially compared to the time granted to collect signatures for an initiative.

(3)  Initiative . All petitions shall be returned and filed with the Clerk within one hundred eighty (180) days from the issuance of such blank petition forms. (1979; 1985)

The charter has some pretty stern words about the penalties that would be incurred by any “city officer” who failed to reveal any “substantial financial interest” in a city contract.

“Any City officer, employee, or appointee who has a substantial financial interest, direct or indirect or by reason of ownership of stock in any corporation, in any contract with the City or in the sale of any land, material, supplies, or services to the City or to a contractor supplying the City shall make known that interest and shall refrain from voting upon or otherwise participating in their capacity as a City officer or employee in the making of such sale or in the making or performance of such contract. Any City officer or employee who willfully conceals such a substantial financial interest or willfully violates the requirements of this section shall be guilty of malfeasance in office or position and shall forfeit said office or position…”

Conclusion: there’s a lot riding on this little contretemps. If council finds that the mayor has “willfully violated the (disclosure) requirements of this section,” then they would have little alternative other than expulsion.

But that won’t happen. The Ethics Commission, which now consists of two retired white guys, is toothless by design, and torpid by nature. They’ll have a genteel interview with the mayor, who’ll claim he did nothing wrong. Absent delivering a subpoena to UBS, they’ll have no evidence of any possible wrongdoing, so they’ll just pass along their non-findings to Council. They don’t want to rock the boat-just pass the buck.

And Council, far from saying “The buck stops here,” will most likely say “Buck? What buck? All is well…”

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Posted by John Hazlehurst on June 16th, 2009 :: Filed under Blog
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Now what, Mr. Mayor?

It’s not often that you have the privilege of witnessing history. 

Today’s hearing of the city’s Independent Ethics Commission might, in retrospect, become a defining moment in the city’s history.

After veteran Springs attorney Lindsay Fischer, who has practiced law in Colorado Springs for 45 years, made his presentation on behalf of his client, Central Bancorp chairman Ron Johnson, it seemed unlikely that the commission would take the action that they had requested.  Johnson had alleged that Rivera had an undisclosed fiduciary relationship with LandCo CEO Ray Marshall, that he had not disclosed that fact, and had thereby violated the city’s ethical guidelines. 

But Johnson had no direct proof of his allegations - so he asked the commission to exercise its subpoena powers to determine the facts.

Then attorney John Cook, who has represented Ray Marshall in a variety of lawsuits, came forward and said, in effect, yup, Rivera was Ray’s financial advisor until the end of 2007, and yup, here are the account records.

So what’s next? 

Here are the obvious questions.

-Did the Mayor reveal his fiduciary relationship to Marshall to his fellow council members?  No.  He simply assured them that he had no conflict and cited UBS policy in saying that he could neither confirm nor deny the existence of any customer account - such relationships, he has said, are absolutely confidential.

-Did the relationship amount to a conflict of interest?  In my opinion, absolutely.  Mr. Marshall may have controlled large sums during the 2005-2007 period when the Mayor acted as his financial advisor.  The mayor may have received substantial compensation as a result of that relationship - or his compensation may have been negligible.  In any case, an undisclosed past fiduciary relationship with the developer who, three months after severing the relationship, was chosen to partner with the city and the USOC, constitutes a glaring omission at best, and a severe conflict at worst.

-How could have the Mayor avoided the conflict?

There’s no easy answer to that one.  By recusing himself from the deliberations leading up to the selection of LandCo, Rivera would, in effect, be revealing that one of the developers was a client - which would have been contrary to his firm’s policy.  It would have also been contrary to his obvious desire to drive the whole USOC process, to lead the city as its Mayor, and to assure the success of the project.  He probably saw the whole LandCo/Marshall involvement as a minor sideshow, one that would affect neither his judgment nor his actions on behalf of the city.

There’s yet another complicating factor.  The accounts in question are almost certainly those which are referenced in multiple lawsuits filed by Mason Investments III and Jack W. Mason against Marshall and LandCo.  In the suits, Mason alleges that Marshall illegally transferred funds from limited liability company that he ran, without the knowledge or consent of other investors, and used the funds to leveraged securities speculation.  If Rivera managed these accounts, and if the accounts incurred losses, and if Rivera knew, or should have known, that Marshall did not in fact have the authority to invest them, then there may be additional lawsuits filed.

The whole situation is at best murky, at worst damning.  It seems to me that the Mayor has little choice but to resign, and thereby end the whole circus.  He can no longer effectively lead this city, and at a time of fiscal crisis, the city needs firm, trustworthy leadership. 

To him, this must seem absurdly unfair.  But life, as President Kennedy once remarked, isn’t fair-and neither is politics.

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Posted by John Hazlehurst on June 12th, 2009 :: Filed under Blog
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USOC/LandCo/City circus ending?

This morning’s joint press release from the USOC and LandCo, announcing that they have “resolved all disputes relating to the USOC and LandCo’s relationship as part of the project to retain the USOC in Colorado Springs” almost certainly signals that a similar resolution between the city and LandCo is in the offing.

So here’s the question: what will the agreement look like?  More to the point, who will pay, and what will they pay for? 

Rumor has it that Stephanie Streeter, the newly-appointed CEO of the USOC, worked out a deal with the City a month ago, which would kick in as soon as the LandCo dispute was resolved.

It has been clear for months that, while LandCo’s finances were not strong enough to move the project forward, they were nevertheless in a position to stall the deal indefinitely.  Such stalling tactics may have seemed unsporting and ungentlemanly, but real estate development is a rough game, and you play with the cards you’re dealt - unless you can deal yourself an ace off the bottom of the deck.

In all probability, LandCo has cut a deal, allowing the company to exit gracefully from the agreement in return for considerations of some sort-maybe in the form of debt relief, or real estate equity, or even, as some particularly suspicious folks have theorized, future tax relief for a project in which LandCo may have a residual interest.

More questions: is there a new developer, ready to step in and take over LandCo’s role?  Has the city filled the gaps with some combination of taxpayer dough, El Pomar grants, contributions from civic-minded citizens, and promises of future largesse?  Will the agreement be submitted to voters for approval, or will Council, as is its wont, just rubber-stamp it with no debate and a hearty round of mutual backslapping?

We’ll see - maybe even by tomorrow.

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Posted by John Hazlehurst on June 10th, 2009 :: Filed under Blog
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Council meets privately with power brokers

The Colorado open meetings law, which governs every elected body in Colorado, is written in clear, direct, and forceful language. 

Its purpose is simple: to prevent elected officials from conducting closed meetings, unless limited to a very narrow range of subjects.

It is lawful for a council to meet behind close doors to discuss lawsuits, certain personnel matters, and certain real estate matters. That’s it - otherwise, any council meetings must be announced properly and open to the public.

But, as elected officials know, there are ways around the law’s strictures. A meeting may be comply with the requirements of the act, but yet be a de facto closed session.

This afternoon, council met with officials of the Colorado Springs Economic Development Corp.  There was no published agenda.  The public was notified of the meeting, as the law requires, by a notice posted in the City Clerk’s office at 30 South Nevada.  It could also be found on the city website (springsgov.com).  In both notices, the venue was described as “The Broadmoor Hotel.”

But here’s where it gets interesting.  The meeting wasn’t held in one of the many conference rooms in the hotel.  Instead, it was a private lunch, held in the Robert Trent Jones room of The Broadmoor Golf Club.

The club, as the name suggests, is not open to members of the public.  It’s reserved for the exclusive use of hotel guests and club members. 

According to an individual who was in attendance, no members of the public or representatives of the media were there. The six council members who showed up may have talked about the USOC, or the NBA finals, or, for all I know, about the perfidy of the media.  We’ll never know - after all, council was just doing its duty, meeting with prominent community members who are committed to economic development.

Nothing wrong with that, is there?

No. But the choice of venue, and the de facto exclusion of the public and the press, is at best inappropriate - and at worst arrogant and tone-deaf.

Come November, you can bet that council will be pushing some ballot issue designed to restore the city to financial health.  Or, freely translated, they’ll want new taxes/new “fees”/new “revenue enhancements.”

You’d think that they’d be going out of their way to convince the skeptical, tax-averse voters of council’s probity, of council’s devotion to the public weal, and of council’s trustworthiness. Instead, they’re oinking down free eats at a private club with the power people, and the uncharitable might assume, figuring out ingenious ways to extract a little cash from the hapless citizenry.

It may be legal - but, to quote President Nixon, “We could raise a million dollars - but it would be wrong.”

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Posted by John Hazlehurst on June 4th, 2009 :: Filed under Uncategorized

My thoughts on the mayor’s speech

One of the few perks available to the Mayor of Colorado Springs is, one hopes, a speechwriter. 

If not, Mayor Lionel Rivera would have been obliged to labor late into the night to produce many thousands of words of flat, turgid prose. If he did, my sympathies!  And if he didn’t, speaking as one with a demonstrated ability to churn out flat, turgid prose, my sympathies go to the folks in the city’s public communications department. 

I missed the speech - so I can only assume that the official trascript of the mayor’s remarks is accurate. 

It’s interesting for its impotent, complaining tone.  Let’s ignore the bizarre shout-out to the estimable Mike Moran, or the fawning tribute to the Independent’s Adrian Stanley, and try to summarize the speech’s content in four very short sentences.

City good!  City broke! Pay up or else! That means you, Mr. & Ms. Taxpayer!

With minor variations, Colorado Springs mayors have delivered the same doleful news since 1981, when I arrived back in town.  The city has been strapped for cash in good years and bad, in sun and  rain, in summer and winter, year after year, decade after decade-and somehow we keep on muddling through.

But our Mayors complain-and that may be because the position they occupy is virtually powerless.

Under the city manager form of government, Mayor & Council can only make policy, not execute it.

The nine-member council hires a handful of senior managers, including the city manager, the utilities director, the city attorney, the city clerk, and the auditor-and that’s it.  Those managers, in turn, run the city.  They hire, they fire, and they execute policy according to their interpretation of Council’s policy directives.

Tha Mayor has no more power than any other member of Council.  He or she cannot, except through persuasion, negotiation, and compromise, fashion policy and direction for the city, and hire folks to carry out those policies.

The council selects its appointees by majority vote-and they owe no more loyalty to the Mayor than to any other councilmember.

That’s why every Mayor in recent history has looked enviously at Denver’s chief executive, who actually runs the city.

Denver has a so-called “strong mayor’ form of government, which grants the Mayor the kind of power that we associate with chief executives-the power to hire and fire, to create budgets, and to, if necessary, run roughshod over a comparatively powerless city council.

Since Tabor was first enacted locally, as a charter amendment during 1991, the mayor’s position has devolved from impotence to irrelevance.  Like the man behind the curtain in the Wizard of Oz, the mayor is powerless…unless we take Eddie Murphy’s advice, given to the spouse who had just caught him “in flagrante ” in the famous SNL skit.

“Who you gonna believe??!! Me-or your lyin’ eyes?”

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Posted by John Hazlehurst on June 3rd, 2009 :: Filed under Blog
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