The Mountlake Terrace City Council approved funding for the annual Tour de Terrace festival Monday night but not before a contentious discussion from members of the Council.
For some background be sure to read our previous article on the issue before proceeding.
In short, councilmember John Zambrano has objected to the City providing funding for Tour de Terrace because Tour de Terrace was not a non-profit organization and Zambrano was not convinced that the Nile Shriners (who are a non-profit) were officially sponsoring the festival. It has been the City’s practice to only grant these funds to non-profit organizations.
Representatives from the Nile Shurtah, a group within the Nile Shriners, commented at the March 3rd City Council work session that they were, in fact, sponsoring the festival and allowing the festival to use the Nile’s non-profit status. It turns out this was not entirely true. In a letter received by the City the following day, Friday, March 4th, the treasurer of the Nile Shriners stated that they are withdrawing their sponsorship of the festival because their Imperial by-laws passed on January 1st, 2011, prohibit them from being a sponsor of the festival in 2011. This apparently came as a surprise to members of the Shurtah whose contradictory comments the previous evening came after the letter from the treasurer was postmarked. This letter was presumably a response to inquiries by Zambrano in February about their association with Tour de Terrace. The failure of the Nile Shriners to communicate the contents of the letter with the Shurtah group has led to confusion as to if and how the Nile would be participating in the festival.
Mayor Jerry Smith is the President of Tour de Terrace as well as a member of the Nile Shriners. Because of his association with the festival, Smith had recused himself from any Council discussion or decisions relating to Tour de Terrace. When the City received the letter from the Nile on Friday afternoon it was just as much a surprise to Mayor Smith. Smith, one of the founders of Tour de Terrace, quickly turned to finding a solution to keeping the festival alive. Though not technically required by the City, Smith made plans to have Tour de Terrace’s own non-profit status reinstated, possibly just to quiet Zambrano’s objections. Tour de Terrace had non-profit status from 2002-2004 before the festival was sponsored by other parties, but it had since become inactive. According to the Secretary of State web site, Tour de Terrace re-registered as an active non-profit organization on Monday, March 7, 2011.
Though the drum that Zambrano had been persistently beating was all about the non-profit status, to Smith this is now about insurance.
Tour de Terrace takes place on City and School District property and both of these entities require indemnity insurance so that they are not held responsible for any losses (injury, property, etc.) associated with the festival. As the sponsoring organization, the Nile Shriners had provided this insurance in the past. According to Smith some quotes for this type of insurance have been as high as $20,000. A cost this high could mean the end of a festival that is completely run by volunteers without any corporate sponsorship. Mayor Smith seemed confident, though, that they could find an affordable solution. Tour de Terrace is one of the largest “Seafair sanctioned” events outside Seattle and while Seafair does not necessarily provide insurance to sanctioned events, Smith says they are helping with the search.
Though the matter had been discussed twice before on February 22 and March 3, Monday was the first Council meeting where all members of the Council were present. City Manager John Caulfield brought up the new information, that the Nile Shriners had withdrawn their sponsorship of the festival and that Tour de Terrace’s non-profit status had been reinstated. There were two items on the agenda relating to the funding: 1) that the Council approve the dispersement of funds recommended by the Lodging Tax Advisory Committee (more on that here) and 2) that the Council approve the funding agreement with Tour de Terrace which included in-kind services. In-kind services are services that the City provides at no charge such as extra police for security and public works personnel.
Zambrano’s comments on the first agenda item were similar to his previous comments, arguing that the application by Tour de Terrace was filled out improperly since Tour de Terrace was not a non-profit organization at the time the application was submitted. For the second agenda item, Zambrano moved on from the profit/non-profit argument and started making insinuations of potential ethics violations against Mayor Smith. Though no detailed allegations were made, Zambrano argued that the City’s funding of advertising costs and in-kind services for the festival could increase the profit to be made and potentially result in personal financial gain for Jerry Smith.
[box type=”normal”]”Is he using his office to gain some kind of special privilege?” asked councilmember Zambrano.[/box]
Tensions were high as Mayor Pro Tem Laura Sonmore and others on the Council were obviously getting frustrated with Zambrano’s tactics. In response to Zambrano’s insinuation that other councilmembers were “voting because of [their] feelings” Sonmore said “As a woman I get perturbed when people accuse me of thinking with my emotions when I’m a trained paralegal and everyone on this council has been trained to look at fact.”
Sonmore asked the City Attorney to comment on Zambrano’s allegations of ethics violations.
[box type=”normal”]”There is the issue of whether or not there is a beneficial interest being recieved by any one of the council members who partake in voting on this action. Mayor Smith, in an abundance of caution, has stepped back and is not participating either in his capacity as Mayor or as an indivudal speaking tonight. Secondly, it has to be a direct financial benefit to that particular council member. I do not have enough facts or background to identify if that is or is not occuring. I’m assuming that it does not occur. These are in-kind service that are provided to the organization, they are not provided directly to Mayor Smith. The key is whether or not there is a direct financial benefit and at this point, based upon what I know, I do not see that,” said the City Attorney Greg Schrag.[/box]
There’s no question about it: Mayor Smith has a passion for Tour de Terrace and the recent objections by Zambrano are seen by some as an attack on the Mayor himself.
When MLTnews asked Mayor Smith about the allegations, Smith said that he has not had any personal financial gain by Tour de Terrace receiving City funds. In fact, Smith says that over the years he has spent around $25,000 of his own money on tents and other equipment that are used for free by Tour de Terrace each year.
The City Council voted 5-1 to approve the LTAC’s recommendation and 4-1 to approve the funding agreement with Tour de Terrace. John Zambrano was the one “No” vote in both instances. Michelle Robles decided to abstain from voting on the funding agreement since she has been a Tour de Terrace volunteer for many years and did not want there to be an appearance of a conflict of interest.
A number of citizens came to the meeting to comment and one comment in particular seemed to resonate with the Council and others in the room. Robert Reedy, who made a similar comment at the March 3rd meeting, said this:
[box type=”normal”]”Let’s get on with this motion. What killed it [a parade] in Lynnwood was the constant backstabbing and bickering that you see in high school. I graduated high school in 1972 and I’d like to leave that behind me and I think the citizens of Mountlake Terrace would like to leave that behind them as well.”[/box]
The chatter after the meeting outside the Council chambers seemed be of a similar note: now that the Council has voted people want to move on and are excited for another year of Tour de Terrace.
Tour de Terrace 2011 will be July 29-31. We will keep this page constantly updated as new information is released.
What are your thoughts? Let us know in the comments.