October 4, 2019, Pensacola News Journal
In Milton, Florida, a small Panhandle city that is home to just over 10,000 people, it looks like there’s a need for improved communication between Milton City Council, Main Street Milton (MSM), and MSM’s board.
Main Street Milton is a community nonprofit with a problematic life story, few assets, and revenue of $78,000 in the first three quarters of its fiscal year. Its mission is to support downtown preservation and economic development in Milton, Florida. Its funder, the city, is seeking to clarify its relationship with the nonprofit after a year of difficulties.
Tonight, the City Council will be voting on the structure of the leadership of the 501c3 public charity, a measure that would move the nonprofit’s two employees, executive director Ed Spears and events coordinator Stephen Prestesater, off of the nonprofit’s payroll and onto the city’s payroll, under the supervision of City Manager Randy Johnson. Until now, Spears and Prestesater have been quasi-employees of the city (with city supervision and benefits) but technically worked for MSM.
Having nonprofit employees report to a public authority can work with a support foundation for a public organization, such as a state university, but MSM is not a support foundation. It does, however, exist in the gray area where it gets its funding from a public organization.
In the past year, MSM has been called to answer for several issues that involve transparency. In the spring, MSM was questioned about possible conflicts of interest in grant awards for the façade improvement program for small businesses. At the time, the council voted to continue funding, with controls.
Then, in the summer, a much-ballyhooed deal for MSM to take over the historic Imogene Theatre fell apart. Spears let Mayor Heather Lindsay know that the proposed promoter and production company which would handle the theater for MSM had backed out of the arrangement. He did not provide a reason—simply stating that MSM would not be operating the theater. Andrade contended that MSM was in violation of the state’s Sunshine Law, which says public organizations must have open public meetings and certain records must be available to public inspection. Andrade added that the proposed theater management agreement permitted purchases outside the parameters of the Memorandum of Agreement (MOA), and the city would incur unauthorized financial liabilities. But while Andrade recommended that the city end its relationship with MSM, the City Council instead set forth to revise the MOA.
The initial revision to the MOA proposed clarifying matters by making Spears and Prestesater direct employees of MSM, answerable to the nonprofit’s board of directors, even as their salaries would continue to be paid by the city. Again, this arrangement is not unusual with foundations that support public organizations. However, Spears and Prestesater objected. They have asked that they become full employees of the city instead.
“It is a change in my employer, not my assignment,” Spears told the City Council. “So, without the financial securities and the backstop the city provides, a lot of those things call into question my personal and professional goals and objectives.” Last week, the City Council supported the request of Spears and Prestesater, rejecting the MOA as a result. Tonight, an official City Council vote to make Spears and Prestesater full city employees is anticipated.
The resistance from Spears and Prestesater to becoming employees directly reporting to the nonprofit was a surprise to the current board, according to the MSM president Cassandra Sharp. Sharp said it is a contracted requirement for MSM to have an executive director, with an approved current city budget item already in place for MSM salaries and operating expenses, along with other costs, of $154,613.
“The city has not communicated any of this [new information],” Sharp says. “This is a complete surprise to the MSM organization. The board was not made aware of this by our executive director, nor were we made aware of the presentation made by the city manager, nor Ed or Stephen’s presentations. The board has not been able to meet to be made aware of the entire situation and to discuss it.”
With conflicts of interest, issues regarding transparency, companies reneging on theater deals, and MOAs that have been approved, then altered, and may yet be declined, it seems the city and MSM need to communicate better.—Marian Conway