During the Nov. 5 Mobile City Council meeting, Councilman and MoonPie Drop creator Fred Richardson was worried about the New Year’s Eve event. He said the city was already a month behind on planning MoonPie Over Mobile and it was time to act, but it appears larger organizational issues plague the event as it enters its sixth year.
“We have no more time to waste,” Richardson said. “We’ve wasted enough time as it is.”
Events Mobile, Inc., a non-profit organization created and largely funded by the city, is in charge of planning Mobile’s New Year’s Eve as well as Kids Days, Brown Bag In Bienville, Beerfest and Market in the Park/Square. In fact, it was given $100,000 by the city in the 2014 Fiscal Year Budget.
With less than 55 days until the MoonPie should slide down the side of the RSA/Trustmark building, though, the board members of Events Mobile, Inc. haven’t met in nearly a year and it appears the organization has lost its IRS non-profit status.
Board member and Communications Director at Downtown Mobile Alliance Carol Hunter said the board hasn’t met since Dec. 19, 2012. More than that, at least two board members have never seen the financial reports from the MoonPie Over Mobile event.
“Ann Rambeau, who is the treasurer, and I were just talking about this, but she has never seen or been given any accounting information from last year’s events,” Hunter said. “I know the city gave Events Mobile $100,000 this year, but I don’t know how much of the initial money (which was $72,345.42) was spent.”
Hunter said the financial information would come from Events Mobile, Inc. Board President Barbara Drummond, who was also Executive Director of Administrative Services and Community Affairs Division for Mayor Sam Jones.
Rambeau said she had the previous finances, but not a budget for this year. When asked, she said she had the basic figures for the New Year’s Eve event, but said she didn’t have the numbers in front of her so she couldn’t provide a figure for what it cost.
However, there is another issue that is perhaps bigger than seeing the 2013-2014 budget.
Under federal law, non-profits are required to file a Form-990, which annually details the organization’s mission, programs, and finances. Events Mobile, Inc. has not filed the 990 for 2012. Typically an organization still has non-profit status by the IRS until it does not file the 990 for three consecutive years.
The current version of the Events Mobile, Inc. started in May 2012. However, it is actually a revamped version of a 1994 non-profit started by Phillip Kent Baxley, who was a Mobile attorney. Baxley was a former FBI agent arrested in 2009 by Harris County, Texas law enforcement for indecency with a child charges.
Since the group had not filed its 990 in several years, the new version of Events Mobile, Inc. had to file the form in December of 2012 to keep its non-profit status. The organization did not so the IRS did an automatic revocation of exemption for the group.
Rambeau claimed Events Mobile, Inc. still has exempt status.
“The IRS only sent an extended questionnaire, but we still have non-profit status,” she said. “The city’s legal department filed the 990.”
She also said the group was scheduling a time to meet soon.
However, according to the IRS, there is no non-profit with exempt status named Events Mobile, Inc. in the city of Mobile. However, Events Mobile, Inc. does appear under a search of organizations that have been automatically revoked of exemption due to failure to file a 990 for three consecutive years. An IRS spokesman confirmed Thursday that the tax-exempt status was revoked because Events Mobile failed to file their Form 990s.
Regardless of the status of Events Mobile, Inc., city of Mobile Chief of Staff Colby Cooper sent a letter to City Councilors on Nov. 6 ensuring them Mayor Sandy Stimpson is behind the MoonPie Drop 100 percent.
“On Wednesday, Oct. 23, 2013, the then-Mayor-elect met with Councilman Richardson, Barbara Drummond and me. In that meeting, Mr. Stimpson unequivocally stated his support for the MoonPie Drop. The mayor has repeated this commitment to anyone who has asked, and never stated anything to the contrary,” the letter reads. “Contrary to the public naysayers, we have done nothing to impede the event and we will do our part to ensure it is a success.”
Drummond currently remains on the board of Events Mobile. Whether the organization’s lost non-profit status will affect how the event is managed is also still not clear.
Audit raises questions
Other questions arose about Events Mobile, Inc. when a copy of the organization’s audit from July 1, 2012 to May 31, 2013 was anonymously provided to Lagniappe.
Although the City Council publicly approved the group $72,345.42, the amount listed as government support was $207,345. The organization should not have had carry forward money from the previous year since the event was produced by the city at that time. Also, Events Mobile, Inc. was not given money by the Mobile County Commission. During that time, the council had to approve every contract for the exact amount or public money from the 500 account.
However, in the audit there is a line item called “public money” in the amount of $36,100. The only other revenue came from proceeds from vendors, which was $36,020.
That means Events Mobile didn’t have $72,345.42 to spend on last year’s event … it had $279,465.
The organization spent the two-thirds of that money during the year.
The largest cost — $85,500 — was for national, regional and local performers at the MoonPie Over Mobile event. Another $57,471 went for stage production and technical costs. Hospitality expenses, which were not specifically defined, cost $26,216. Around $12,000 was spent on insurance and $12,600 went to marketing, advertising and promotion.
The total expenses for the year were $206,446, which meant a $73,019 balance left for the organization.
Since the expenses were under the control of Events Mobile, Inc., they did not require any approval by the city. Typically, any contract more than $7,500 requires council approval.
Just before the MoonPie Drop on Dec. 31, 2011, Lagniappe asked Drummond the cost of the event. She said everything would be in the 990 and would not give a total amount. That 990 has not been filed according to the IRS.
With the carry forward from last year combined with the $100,000 budgeted by the city for this year, Events Mobile, Inc. would have $173,019 to put on the MoonPie Drop.
Further attempts to contact Drummond were unsuccessful.
Updated at 5:30 p.m. Nov. 7 to include information about the audit.
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