Mark Padgett’s candidacy for mayor of Knoxville rests heavily on his business experience and accomplishments. Since launching his firm, eGovernment Solutions, on a shoestring in 2005, he’s at least managed to keep it viable for six years, which is an accomplishment in itself for a small-fry startup. All the more so, considering that he was a 26-year-old executive assistant in the state Department of Safety with no business experience when he took the plunge.
Now he boasts that, “I’m the only person running for mayor that has ever created a job, run a business, started a business, or met a payroll.” And he goes on to say that, “If there’s a litmus test for being the mayor of a city, the one thing we can’t afford to get wrong is growing jobs and the economy, and if you’ve never created your first job how are you going to know what that looks like?”
Yet questions abound about just how successful Padgett has been in building his business, which provides software to local governments, primarily county clerks and county trustees with an emphasis on offering online services, starting with vehicle registration renewals.
Padgett’s answers to many of these questions aren’t very illuminating. He won’t divulge how many employees eGov has or what its revenues are—beyond saying, “there are under a dozen employees and contractors and under $1 million in revenues,” and invoking competitive considerations for not being more specific. My clear impression is that he believes revealing how small his business is would work to its disadvantage vis a vis the much larger competitors he faces in the market for both county clerk and county trustee software packages.
Padgett acknowledges that eGov has yet to turn a profit, but insists that’s because he’s elected to pour all its revenue (beyond the meager $29,092 in compensation he took last year) back into enlarging and enhancing the firm’s software product line. But he won’t say how much revenue growth has resulted over any given period of time except to say, “It’s growing.”
In an interview on the website Entrepreneurs of Knoxville, Padgett said, “What I’m proudest of is that in 2005 there were no online services at a county anywhere in Tennessee. We pushed, pulled, drug, and beat counties into taking payments online and moving into the 21st century and made government more accessible, transparent, and efficient.”
But this claim is inaccurate on all accounts. Online vehicle registration/tag renewals, which represented eGov’s prime initial focus, were first offered by Hamilton County in 2001 with software that its longtime County Clerk Bill Knowles developed on his own. Sumner County, north of Nashville, was next up in early 2005 with software provided by Business Information Systems, a much larger, well established competitor based in the Tri Cities area.
Of the state’s 93 other counties, only two—Davidson and Sevier—have subsequently opted for eGov’s online tag renewal services. Davidson County Clerk John Arriola speaks highly of Padgett, to whom he’s made a campaign contribution, and of eGov’s “innovative” software. But Arriola is now under scrutiny from the Tennessee Bureau of Investigation over undisclosed income from performing weddings. Meanwhile, the Sevier County clerk who picked eGov, Joe Keener, is under indictment for stealing over $90,000 from the clerk’s office. And an audit by the state comptroller’s office found that he made $121,000 in payments to eGov on an improper basis. But Padgett has insisted there was no wrongdoing on his or eGov’s part.
Meanwhile, BIS claims to be offering online plate renewal services in 67 counties, including Knox, which picked it over eGov in a 2008 competitive selection process.
EGov has fared somewhat better in getting county trustees to sign up for its services that include online payment of property taxes. The firm claims seven counties as clients, but only one of them (Sumner) is among the 15 largest in the state, and the one recent addition to the list (Hancock) is among the very smallest.
Padgett has said that “Being an entrepreneur is not only being at risk, it’s being able to set the vision—the same thing the mayor has to do—and to strategically invest in that vision with the right people.” But of three computer programmers who are known to have been with the firm during the 2007-2009 period when much of its software was being developed, not one is still there. Two of them, whom I was able to contact, speak highly of Padgett; I couldn’t reach the third. But an anonymous posting about eGov on the website Career Bliss asserts that, “The model on which the business was built was not sustainable. Decisions were often made in haste without proper analysis.”
These slams can, of course, be ascribed to the venting of a disgruntled former employee. When asked to respond to them, Padgett says, “I wouldn’t expect every person that’s worked with us to agree with every decision, but I think time has proven that we’ve made the right decisions and been able to grow from very modest means.”
What’s harder to fathom is why Padgett, at age 33, would opt to turn away from his still fledgling business in order to run for mayor. (If elected, he would be the youngest person ever to hold that office, so far as anyone can recall.) He acknowledges that an investor and co-owner of the business, Blake Bookstaff, “was worried that it might harm the business in some way.” But he’s been seeking, and believes he’s close to getting, a new CEO to whom he intends to turn over the helm sooner rather than later, and without regard to whether he’s elected.
Speaking as the son of longtime former County Clerk Mike Padgett and the grandson of a city councilman, he says, “I grew up in a family where serving your community was the greatest thing you could do... I feel Knoxville has done so well under a business-minded mayor [Bill Haslam] and that needs to be continued. So when it comes time to step up and offer yourself for public service, you should be willing to do that.”
Haslam often stated that governing a city is quite different than running a business, and even if Padgett’s business was more successful, it’s doubtful whether his time has come to be mayoral.