The El Dorado City Council has approved a $200,000 funding request to operate and manage the MAD Playscape for the 2024 season.
However, the vote did not come without a challenge from one council member about the proposed contract for services between the city and MAD.
During a regular meeting Feb. 8, Greg Downum, chairman of the El Dorado Works Board, presented the funding request to the city council.
Two days earlier, the EWB -- who administers the one-cent, city sales tax that is earmarked for economic development, municipal infrastructure and quality-of-life projects -- approved the $200,000 funding request from MAD.
The EWB then forwarded its recommendation to the city council for consideration.
The city owns the playscape and leases it to MAD for a nominal fee. MAD operates and manages the facility, which includes a splash pad.
Downum explained on Feb. 8 that the EWB and the city have approved funding for MAD to operate and manage the playscape for the past three years, with $400,000 in 2021; $300,000 in 2022; and $200,000 in 2023.
"The reason for the difference is, the first year of the operation, we weren't really sure on the budget, so we ended up overfunding what they spent, so we made adjustments in subsequent years to try to keep the cumulative spend in line with what we had approved from a funding standpoint," Downum told council members.
Pam Griffin, MAD president and CEO, told EWB members on Feb. 6 that the 2024 budget for the playscape is projected budget at $277,658, adding that Murphy USA kicks in matching funds to help out with MAD operations.
Downum told city council members that the $200,000 that was approved for the playscape in 2023 was nearly $50,000 less than actual expenses of $247,344.
He noted that attendance for the playscape grew by more than 6,000 visitors last year, going from 32,664 in 2022 to 38,687 in 2023.
Griffin previously told EWB members that MAD partnered with other groups to introduce new activities at the playscape in 2023, including an Easter egg hunt in March, Juneteenth celebration in June and a Back-t0-School Bash in August.
Griffin said monthly attendance numbers increased in March and June due to activities that were held at the playscape during those months, with June drawing the highest monthly attendance ever at 8,515.
She added that attendance in June is typically higher because it is the first full month that the splash pad is open each year.
The pad typically opens for the season in May.
Inclement weather stifled attendance at a spring break event last year, Griffin said.
Agreements and contracts
Funding for the MAD Playscape has traditionally been pulled from the Community Development category of the El Dorado Works tax initiative, Downum told city council members.
Fifteen percent of collections from the El Dorado Works tax -- which went into effect in 2015 and will expire in 2025 -- is dedicated to community development projects, with 6% allotted for parks and playgrounds, including sports, recreational and outdoor venues or projects.
Twelve percent of tax revenue was devoted to development of the Festival City/MAD arts and entertainment district.
"So, there is no additional service agreement other than the original contract that the city entered in with MAD a number of years ago? Is that it? There's no other document?" Council Member Frank Hash asked.
In 2019, the city purchased the playscape from El Dorado Festivals and Events, Inc., the private, nonprofit organization that developed MAD, for $3.5 million and entered into an agreement to lease the property to MAD for $10 per year for 99 years.
The playscape is one several properties within the MAD entertainment complex that were purchased with the city's multi-million-dollar contribution toward the development of MAD; deeded back to the city upon completion; and operated and managed by and leased to MAD for a nominal fee.
In late 2020, the city council approved a contract for services, allowing MAD to operate, manage and maintain the playscape.
An initial $1.2 million contract proposal came with a term of Jan. 1 - Dec. 31, 2021, and an option to extend the contract with a mutual agreement from the city and MAD.
The initial request called for payments of $400,000 per year -- to be made quarterly -- for three years.
However, the EWB and city council later agreed to fund the request on an annual basis, rather than enter into a three-year contract, and make payments in arrears to account for the actual hours that the playscape is open.
In a 2021 audit, state legislative auditors said the contract was approved without consideration of the lease that was granted in 2019 -- a violation of Article 12, Section 5 of the Arkansas Constitution, prohibits counties, cities, towns and other municipal corporations from becoming "a stockholder in any company, association, or corporation; or (obtaining or appropriating) money for, or (loaning) its credit to, any corporation, association, institution or individual."
Last November, Hash asked if the initial contract had been extended past its expiration date of Dec. 31, 2021, saying then that the council had not received documentation indicating such an extension.
Council Member Vance Williamson, who also chairs the city council's finance committee, said the EWB agreed to extend the agreement and the request was later approved by the city council.
'We have a contract every year'
In response to Hash's question on Feb. 8, Griffin said a contract for services for the 2023 season of the MAD Playscape expired on Dec. 31.
"And we'll need to renew it if this funding is approved (for this year)," Griffin said.
Mayor Paul Choate said the $200,000 for the 2024 season will not be distributed "until we have a valid contract in hand."
"It would be good if you shared that information with us and we wouldn't have to go back and forth fishing for clarity here," Hash said.
"It wouldn't be a reason for a contract if there is no agreement yet," Williamson said, sparking a brusque exchange with Hash.
Hash contended that the agreement stems from the property purchase and lease that were let in 2019.
"That's over. We have a contract every year," said Williamson.
"No, it's not. It's perpetual," Hash shot back.
Downum then stepped in and explained that the $200,000 funding request is separate from the property lease agreement and is part of a contract for services "to provide the playscape."
"My understanding is there has been a contract for services every year that covers this funding," Downum said.
"I'd like to see that. I don't know about it," responded Hash, adding that MAD was to incur all expenses when the lease agreement was signed with the city.
He again referred to the 2021 legislative audit findings, insisting, "The legislative auditor has found that in ... '21, we shouldn't have spent that $400,000 down there."
"I do not interpret that as what that says. Our (Arkansas Municipal League) attorneys didn't represent it that way and neither did the Murphy Arts District attorney (Matthew) Shepherd represent it that way," Williamson said.
He reiterated that the contract for services to operate and manage the playscape is separate from the property lease agreement between the city and MAD.
Council Member Judy Ward pointed to the El Dorado Works tax initiative, noting that 12% of tax revenue is dedicated to Festival City development.
"And you're saying that's still coming from that 12%, correct?" Ward asked.
Downum said the amount of tax revenue that has been allocated to Festival City development since 2015 has fallen below tax collections and projections.
For the past three years, funding for the O&M of the playscape and splash pad has been taken from the Community Development category of the El Dorado Works initiative, he said.
"So, if you look at them together, then we are a little bit over the cumulative 12%," Downum explained.
"Historically, like I said, we've approved this out of Community Development. It really fits better as a contract for services, rather then infrastructure for MAD," he continued.
"Well, the 2021 audit said we're doing this wrong. It's a legislative audit finding," Hash pressed.
Choate then called for the EWB's recommendation and Downum asked the council to consider the $200,000 funding request to be paid quarterly and in arrears, subject to a contract for services.
The vote was 7 - 1, with Hash voting no.
The council also reappointed Sara Coffman to the EWB.
Coffman was appointed to an unexpired term on the board in 2020. The seat was vacated by the late George Calloway, Jr., who had resigned due to personal reasons.
The five-year term expired last month.
Council Member Willie McGhee, who voted in favor of the reappointment reiterated a previous call to inject new blood onto city boards and commissions.
"I just think we're setting a precedence when we don't change new positions and new people, that it really just stagnates the old way of doing things," McGhee said.
"I just think that until we start getting young people on these boards and prepare to pass the torch and educate them on how government works in this city and around, I just truly think we're going to be in the same vision of doing things," he continued. "And it just really bothers me that we don't give other people a chance to govern or help govern."