At last Tuesday’s Council meeting (09/17), MPT Murdock commented, “Brea prides itself on running itself as a business.”
I was in the midst of preparing this blog post and thought his off the cuff remark would be the perfect opening statement.
If Murdock’s “announcements” are a form of early campaigning via captive media, then he’s doing more to harm than help his efforts at seeking a second term.
A case of chronic hoof-in-mouth disease?
Murdock’s misstatement du jour at the end of the Council meeting of August 20 was a doozie. Commenting on Brea Fest, Murdock said, “We made the most money for the arts here in Brea than we’ve ever made in the history of Brea Fest.”
Here, listen for yourself. I don’t have to make this stuff up, not while Murdock’s on duty.
So wrong on so many counts I’m afraid. I cringed when I heard Murdock toss that one out like he’s the expert.
Doing my homework, getting my facts straight.
As Chairman of Brea’s Cultural Arts Commission in 2006, I tackled these same issues of truth in advertising and proper accounting. When Murdock spouted off I was reminded that little must have been done.
I made a detailed California Public Records Act (CPRA) search of documents relating to Brea Fest finances and had a lengthy meeting last week with Finance Director Bill Gallardo, Community Services Director Chris Emeterio and Community Services Manager Emily Keller.
I believe a have a better grasp of the details, of the truth, than our Mayor Pro Tem.
Let’s start with Brea Fest 2006.
It was reported to the Cultural Arts Commission that Brea Fest had generated almost $14,000 for the arts. When I asked for a full accounting, what I was given excluded a large portion of the costs… the indirect costs of staff time to put on the event. When estimated indirect costs were subtracted from the net revenues the loss was almost $10,000.
When I asked what account the money would have been deposited into, had there actually been a profit, I was told there was no account for the arts, the money just gets dumped into the General Fund.
Then Community Services Director Malkemus and Finance Director Gallardo agreed that tighter reins on promotional language about Brea Fest were in order. It was apparent that, with full accounting, the event had never generated a profit nor provided funding for the arts. Are you paying attention Mr. Murdock?
Another brief history lesson, if you please.
Launched back in 1987 as A Taste of America, Brea Fest was meant to be a fund raiser. There was even a trust account established specifically for the profits. The problem was twofold, first there were never profits, only proceeds… which we all know aren’t the same.
Problem two, somewhere in the early ’90’s auditors determined that trust accounts violated good accounting practices so they were all shut down, including the one for the arts. Subsequently there has been no way to follow the money to ensure the arts benefitted as proposed. Without true profits I guess this was a moot point.
Lessons learned, 2007 sees a reduction in direct costs.
Having taken a closer look at the facts, staff was able to make substantive changes in how Brea Fest was carried out and several thousand dollars were eliminated from direct costs. It was assumed, but not validated, that indirect costs also dropped, but still hovered near the $20,000 mark. Net proceeds for 2007 were $15,905 with a loss of only $4,950. Based on what we’ve learned since, the loss was likely much higher than that.
In 2008 net proceeds were virtually the same, $15,254. The big difference? A full accounting of indirect costs was conducted. The report “Brea Fest Costs 2008” showed total revenue of $32,000 and total expenditures of $57,102.93.
Brea Fest 2008’s loss was subsidized by the General Fund to the tune of $25,102.93.
This pattern has continued unabated. Brea Fest 2013, which according to MPT Murdock “… made the most money for the arts here in Brea than we’ve ever made in the history of Brea Fest.” posted a loss of approximately $19,000.
So where did Murdock get his facts?
Well it wasn’t from the 112 pages of documents I waded through. I’d requested all documents provided or available to Murdock be separated into two piles so I could see what he had looked at. The city clerk informed me that, “there are no identifiable records responsive to ‘those provided to Mr. Murdock’. So he looked at nothing.
He didn’t get facts from a briefing by Gallardo, Emeterio and Keller, who by the way have put in a collective 87 years of dedication and hard work down at city hall. This report could not have been nearly as complete and thorough without their help.
Sitting down with them for a couple of hours covered twenty-six years of Brea Fest history which, along with the 112 pages of documents, gave me a pretty clear picture of the truth.
Okay, what’s the bottom line here?
The good news is that, in the future, promotional language for Brea Fest will better characterize the nature of the event and stop suggesting that it is a fund raiser for anything. It’s called truth in advertising.
Also, Gallardo and Emeterio have confirmed that indirect costs will now be captured and factored against revenues to provide Council with a more accurate profit and loss accounting of Brea Fest and other major city events.
The whole truth and nothing but the truth is what it takes to help Council properly do the job for which they were elected.
Through staff I encouraged Murdock to do a simple mea culpa, correcting the error of his comment and giving Brea residents a better idea what the real facts are and why. He’s said nothing except that silly comment I opened this blog with, “Brea prides itself on running itself as a business.”
Not thanks to you Mr. Murdock… not thanks to you.
Brett, put this on a little card and carry it in your wallet. “Better to remain silent and be thought a fool than to speak and to remove all doubt.” – Abraham Lincoln