Without City Council approval, the previous mayoral administration wrote off $1.9 million worth of man-hours and $1.06 million in rental fees to private organizations in fiscal year 2012-2013, according the city’s finance department. The “fee waivers” were granted by former Mayor Sam Jones’ office and in many cases were signed by former Chief of Staff Al Stokes.
As dozens of organizations or individuals were granted the waivers, often by simply writing a letter to the mayor’s office, the city collected just $55,560. Because the amount lost does not include the cost of equipment the city donated to various private events, Finance Director Paul Wesch called the $2.9 million total loss “very conservative.”
Beginning April 1, Mayor Sandy Stimpson’s administration halted the waivers, allowing exceptions for only for “extraordinary circumstances.” Eventually, they hope to create the city’s first policy governing the waivers, requiring applicants to meet a set of benchmarks and gain the support of the full city council.
“We can’t say how long this has gone on but most of these organizations have done this repeatedly” Wesch said. “I’ve seen letters, memos, emails and photocopies of fee waivers granted and signed by Al Stokes in most cases.”
As far as personnel costs, rather than charge the organizations and applicants the $25 average hourly cost for police presence or assistance from public works employees to work private events, the previous administration allowed those employees to earn time-and-a-half f at the events, or twice their normal hourly rate if the event was on a holiday.
As a result, police department employees were paid an extra $1.3 million of taxpayer money to work private events, public works employees were paid an extra $366,248 and fire department employees were paid an additional $189,981 for the year.
And while the rental fees were waived at numerous city-owned facilities, the convention center and the civic center were the biggest losers, missing out on $753,477 and $312,278 respectively.
The fiscal year referenced by the Stimpson administration is also the subject of a review by Moody’s Investors Services that may result in a downgrade of the city’s credit rating.
But in the past month, the administration has denied a $3,000 fee waiver request from the Boys and Girls Clubs at the convention center, a $7,500 fee waiver request from Bishop State Community College at the civic center and a $15,500 fee waiver request from Distinguished Young Women for the civic center, among others.
Stimpson’s Chief of Staff Colby Cooper said organizations affected by the administration’s new moratorium have been largely receptive to the changes and said “gross waiving” of rental fees by a municipal government is unusual and wasteful.
“It impacts the efficient use of employees for day-to-day operations,” Cooper said, adding “at the end of the day, if you’re not making a profit, you’re hoping it is a zero-sum game.”
Mary Zoghby, executive director of the Boys and Girls Clubs of South Alabama, said she couldn’t recall when her organization was first granted a fee waiver, but the city’s revocation for April’s Youth of the Year Luncheon “wasn’t a large amount of money.”
“We’re talking about $2,500,” she said. “We try to net a certain amount off of a fundraiser and that’s an expense we have work into it now.”
The Boys and Girls Club has a $339,754 performance contract with the city in the current fiscal year. Speaking about a more concrete policy going forward, Zoghby said she was told no organization receiving other money from the city would be granted a fee waiver in the future, a situation she was comfortable with as long as it applied equally to everyone.
“As far as I’m concerned, if everybody is treated the same, I’m OK with that,” she said.
Zoghby called the convention center is “a great facility” and said the city’s fee was reasonable. Other venues wanted to charge extra for the set-up of a stage, but that expense was included in the city’s fee, she said.
Cooper said deciding whether to continue granting fee waivers to larger conventions and events would be more difficult, because they are often offset by a substantial economic impact.
“We don’t want this to be subjective,” he said. “We’re hoping to distinguish a scale and establish a level where a request for a waiver would come before the city council because at the end of the day, it will be beneficial to the city to grant some waivers.”
David Randel, president of the Mobile Bay Convention and Visitors Bureau, said he’s expressed his concerns about the waiver moratorium with the new administration. Last year, Randel was granted every one of the 10 fee waivers he requested, resulting in seven events that ultimately took advantage of what the convention center had to offer.
“In the convention industry, the businesses we work with have a choice and incentives are extremely important to attract them,” he said. “The administration has been wonderful to understand that and I hope some of the information we provided can help them make their decisions.”
Danny Corte, director of the Mobile Sports Authority agreed, adding that fee waivers helped lure a conference that will bring 30,000 female bowlers to the city in 2021.
“Around the nation fee waivers for big events are sort of the norm,” he said. “With the bowling congress, it comes down to a competitive thing. You don’t even bid on something like that unless you’re not going to charge rent or support services.”
Searching for other examples, Cooper said he was impressed by a fee waiver policy adopted by a California city that simply denied any requests by private businesses, any event that charges admission fees or any organization that receives other money from the city.
“Section 94 of the Alabama Constitution says municipalities may not grant public money to private persons or corporations and my concern is these waivers have done exactly that,” he said. “We’re working very hard to try to find the solution and to make sure we do so responsibly.”
Wesch and Cooper said it was not clear how long fee waivers had been handled as they were in the year in question, but that it appears to have been going on for some time. Contracts for events at some city-owned facilities even had language instructing patrons that a fee waiver could be obtained by contacting the city. That language has been taken out of current contracts, Cooper said.