Columbia orders review of meal tax spending by some 90 cultural organizations

The city of Columbia is going to hire an accountant to examine most of the spending of public money by arts and cultural groups since the summer of 2014.

The vote grew out of a tense discussion Tuesday afternoon when the non-profit arts advocacy group OneColumbia defended its spending following a critical audit by WebsterRogers, the city’s outside auditing firm.

The review of how cultural groups use the hospitality tax, or meal tax, is a “compliance review,” not a formal audit. Council members voted on the idea after 10 p.m. Tuesday as council’s meeting was about to end.

If the examiner finds more examples of misuse of the 2 percent tax, paid largely by patrons of the city’s restaurants and bars, then a formal audit might be launched, said Councilwoman Leona Plaugh. She is one of the six council members to vote for the review.

Mayor Steve Benjamin was the only dissenting vote. He objected strenuously, calling the review “an assault on the arts.” He also questioned whether the financial analysis would be an audit, which Benjamin said is expensive.

“Mr. Mayor,” Plaugh responded, “this is not an assault on the arts. This is about us doing our jobs” of monitoring public spending.

The review means the examiner will cull through thousands of expense claims submitted to the city from nearly 90 organizations that have shared almost $12 million the city has allotted them since July 1, 2014, to promote events that spur tourism.

Wednesday, Benjamin said the idea by Councilman Moe Baddourah was improperly brought to a vote, was poorly thought out and meal tax recipients weren’t given a chance to respond.

Two of the affected groups said they welcome the financial review.

“We all need to be equally accountable,” said Lee Lumpkin, chairman of the Columbia Classical Ballet’s board. “I’m not afraid of it. We are using taxpayer dollars.”

John Whitehead, director of Columbia Music Festival Association, said, “I don’t see how that would be a problem.” His association represents about 25 mostly small arts and cultural organizations.

After giving a presentation during council’s afternoon work session, OneColumbia’s director, Lee Snelgrove, said he did not anticipate a vote. “It seemed like council thought it wasn’t going to do that at the work session.” he said. “I don’t really have much of a response (to the vote). I think that’s council’s prerogative to do that.”

Benjamin defended OneColumbia during the work session. “I didn’t have to hear your entire presentation,” he told Snelgrove. “To be honest, you had me at hello.”

But OneColumbia, which packed council’s conference room with supporters, did not get the same reception from others at the meeting.

“Use good judgment – that’s all I’d ever say to any organization that uses public funds,” city manager Teresa Wilson told Snelgrove after he cited then-city attorney Ken Gaines’ opinion that Snelgrove has said allows his group to submit claims for all its expenses to be covered by the tax money. But, “obviously, staff is not going to go against what the auditor says,” Wilson said. “We won’t.”

Councilman Howard Duvall said, “I don’t interpret what Ken Gaines wrote as giving you carte blanche to fund everything. We cannot legitimately fund board retreats, rents, light bills.”

Baddorah, citing the audit by WebsterRogers, was more blunt during the work session. In pressing for the review of all meal tax recipients, he likened the auditor’s findings to a slap in the face. “I don’t want to get slapped in the face anymore,” Baddourah said.

In its 2014-2015 audit, WebsterRogers faulted the city for allowing the use of meal taxes to pay for food and beverages, including for board meetings. That is not permitted by the state law that governs how meal taxes may be spent, auditor Bud Addison said. He said taxpayers also supply 99.9 percent of the group’s annual budget.

Exempt from the review will be $5.5 million in meal taxes that council has transferred during the two most recent fiscal years to the city’s general fund, Baddourah said. That money goes for park rangers at city parks, maintenance of roads that lead to tourist destinations and other expenses that qualify for meal taxes, said Missy Caughman, the city’s budget director.

This story was originally published April 6, 2016 at 8:04 PM with the headline "Columbia orders review of meal tax spending by some 90 cultural organizations."