Can Haslam continue to lead the city effectively while he runs for governor?

When Mayor Bill Haslam announced his plans to run for governor, I initially had mixed feelings. On the one hand, I was excited by the candidacy of someone I hold in high esteem and believe would make an excellent governor. On the other, I was concerned that the city might suffer from a leadership gap as he inevitably turns much of his attention toward the campaign leading up to the 2010 state election and, if elected, vacates the final year of his term as mayor in 2011.

After talking to Haslam and several City Council members, my concerns have been allayed. They are all convinced that our dexterous mayor won't lose his grip on city governance and that the stellar administrative team he's assembled is fully capable of carrying out his agenda.

"I wouldn't have thought about running for governor if we didn't have this great team here," Haslam claims. And while that may sound self-serving, council members echo his confidence in people he's brought in, like Deputy Mayor Larry Martin and policy and process guru Bill Lyons, tempered by the experience of, as Haslam puts it, "people who've been around for a long time like Sam Anderson."

After all, what other municipality has as its second in command the retired CEO of the city's largest bank, as the well-connected and civic-minded Martin was at First Tennessee. Another fairly recent addition to the administration, Dave Hill, seems to have proficiently taken the ball and run with it on what promises to be the biggest initiative of Haslam's second term, South Waterfront development. And the woman who may be Haslam's prize recruit, Madeline Rogero, has been transformed from his 2003 mayoral opponent into his managerial solution to what had been the city's troubled Department of Community Development.

In further response to the question of whether his gubernatorial bid could detract from his mayoral performance, Haslam asserts that as he enters his sixth year in office, "we've already gotten a lot of the heavy lifting done that sets the stage for things to be carried out. ...Even if I wasn't running for governor, we're at the point where with our great team I can afford to delegate in ways that you wouldn't when you're just starting."

The biggest single lift of his first term as mayor was probably completion of the Gay Street cinema conceived as a catalyst for downtown redevelopment. When its cost was pushed up to $15 million in order to allow for the preservation of historic buildings that once housed the S&W Cafeteria and other landmarks of a bygone era, Haslam covered the financing gap by personally buying over $4 million in risky bonds backed solely by the cinema's revenues. After some fits and starts, a new $26 million downtown transit center is now on track for completion in early 2010 with largely federal funding. The city has just committed $3.4 million for a long-in-the-planning new streetscape for Gay Streets' 100 block, and a makeover of the Cumberland Avenue strip is also in the works.

But doesn't the nation's severe economic downtown now threaten to infringe on revenues needed just to sustain the city's operating budget, let alone make big new commitments such as the ambitious South Waterfront development plans envisioned as the hallmark of his second term? Haslam acknowledges that his budgetary planning calls for "holding down everything from capital expenditures to operating costs." But he insists the city is reasonably well positioned to weather the economic storm for several reasons.

For one, "I think we're helped by the fact that we're primarily property tax driven which is a more stable source of revenue than the sales tax on which the state primarily depends." Secondly, the 35 cent (13 percent) property tax increase which Haslam instituted during his first year in office has enabled him with good management to build the city's reserve fund (aka fund balance) to $48 million presently from $18 million when he took office. "The bond rating agencies want us in the high 30s to maintain our AA+ credit rating, so we have some buffer there which we're going to need," he says.

So, "while we're going to be a little less aggressive in taking on big projects now than we would have been...we're not going to panic and overreact. Our commitments to all the things we've been working on, whether it be South Waterfront, or Cumberland, or downtown, none of that has changed."

The South Waterfront looms largest. Work is due to start in April on $15 million in public improvements that include access roads and a seven-acre waterfront park on property that the city is in the final stages of acquiring. Funding for the improvements is supposed to be derived from incremental property taxes on a $58 million, 137-unit town house project that development partners Mike Conley and Mike Stevens are planning for the site. Given the housing market slump that's severely curtailing new residential construction, it would seem to take a leap of faith to believe that TIF revenues can be generated to take taxpayers off the hook for the public improvements anytime soon. But Haslam insists, "We have a developer who is ready to go forward with his end of the deal." So the public sector work is scheduled to go forward subject to a development agreement that could bring it to a halt if the private development doesn't proceed on schedule.

One challenge that he will face at the very time his gubernatorial campaign is bound to be intensifying is the turnover due to term limits of five of the nine seats on City Council following this coming November's city election. "It's been a huge luxury to me to have worked with the same nine council members during the entire time I've been mayor. We don't always agree, but everybody understands how the budget works," he says. Relating these workings to five new council members promises to be a challenge.

If Haslam is elected governor in November 2010, then the vacancy in the mayor's office would be filled by appointment until the city's 2011 election. City Council would select the acting mayor from among its own members and this, too, could prove to be an awkward, if not schismatic, process.

Yet for me the rewards of having someone of Bill Haslam's caliber as governor outweigh the risks of a temporary dislocation of city government.