Mayor Sanders vetoes Steel Horse Rally funding, sets ‘unhealthy precedent’

Fort Smith Mayor Sandy Sanders vetoed an ordinance to provide organizers of the Steel Horse Motorcycle Rally with an $84,000 donation from the city's general fund.

With a 4-3 vote, the Fort Smith Board of Directors voted Jan. 20 to provide the money to rally organizers. The veto letter was issued on Jan. 26. It takes five votes of the seven-member Board to override a veto.

"While supporting the concept of the Steel Horse Rally," Sanders wrote, "I cannot justify the use of tax dollars for what I believe should be a private sector effort, just as Bikes, Blues and Barbecue is in Fayetteville."

The Mayor continued: "The Board of Directors and staff devoted a great amount of time and effort to establish the 2015 budget. Every single department had funding requests reduced. Additionally, the City has a system for organizations to complete an extensive application process to contract services for the City. The 2015 City budget for more than 20 organizations is $145,800, a reduction of $16,200 from last year. How can we allocate $4,950 for the Crisis Center for Women or $4,500 for the Children’s Emergency Shelter, which went through the extensive review process by a panel of City residents, and then suddenly find an additional $84,000 in the budget for a brand new start-up effort which is almost 60 percent of the budget for those organizations with performance histories.”

Sanders also wrote that the ordinance set "an unhealthy precedent, which has already manifested itself in notification by another new organization informing the City that substantial funds to support that event will be requested from the City."

The Mayor did not provide further comment in the letter on what that request was, but stated his his veto was "in the overall best interests of the City.”

Upon follow-up, Sanders said the additional inquiry came from Jeff Gosey, owner of Arkansas Poly and AJ’s Oyster House. Gosey had exchanged emails with Fort Smith Director Mike Lorenz, who championed the Steel Horse Rally. In Gosey’s initial approach, he noted his event was being organized by "a group [of] FSM [Fort Smith] business owners” and is slated for July 31-Aug. 2.

"We will offer a lot of different genres of music … country, rock, blues, bluegrass on Friday and Saturday,” he wrote. "Sunday we will hold a Gospel Brunch. We also plan to have Art tents. Act and artists will be local, regional and national. So, we will have something for everyone.”

Gosey said this new event had a budget of $200,000 and 20% had already been received through private donation after a month of fundraising.

"We are starting a Kickstarter page to help raise funds as well. We launch our brand and label within a week, fingers crossed. We would like your support and could use some funding from the City as well,” he states.

Lorenz responded, voicing his confidence in the economic impact of the Steel Horse Rally. He added that Steel Horse event organizer Dennis Snow came to the city with "a plan, detailed event and budget information and met with us publicly three times and most of us in person as well to present the rally and allow us the ability to vet the event.”

Lorenz said he didn't support providing funding past three years for any such event, Steel Horse or otherwise.

Snow told The City Wire in a phone interview Monday he was “of course, disappointed” the funding unraveled but he and the committee “would have rejected” it anyway without a veto.

Snow said Sanders called him before releasing the veto letter to “let me know he was going to do it. … My response is that this may actually help us in the long run. For starters, the vote was extremely close. Four members voted in favor of funding the rally, while three were against. We were pleasantly surprised with the outcome there, but when we received the agreement from the city director and the Mayor, it said the money could only be used for musical entertainment, which is not how we presented the request.”

Snow said he didn’t know if the altered agreement was “a precursor to the veto,” but that it would be rejected because “it wasn't what we presented to the board, and it wasn't what the board voted on.”

“We’re a 501(c)(3) just like anyone else, and for them to dictate a) how the money is to be spent, and b) tell us we have to pay it all back if our net receipts show what would normally be a profit, we would have had to reject it anyway.”

Snow said the plan was to donate all the event's net profits to area non-profit organizations. Under the city agreement, those funds would have first gone to repayment. For example, if the event turned a $100,000 profit, he said, only $16,000 would have been eligible for donation.

“This rally is for the people and now it will be funded by the people. We’ll do the best we can from businesses as well as individuals,” Snow said. “We already have over 200 individuals, who have agreed to devote their time. Now we need folks to open their checkbooks for a tax deductible donation.”

In a follow-up email, Snow said the group’s legal representative “never received a copy” of the final agreement.

“To the best of my knowledge, this was not the agreement presented to the Fort Smith Board of Directors nor was it the agreement on the agenda that was approved at their last meeting, 4 to 3. I'm not sure where this attached agreement and its wording (repayment of $84,000 to the City, unlike funding of other charities) came from, because it is certainly not what was discussed in several Fort Smith Board of Directors meetings.”

Link here for a copy of the agreement Snow was provided by the city.

The City Wire co-owner Michael Tilley is a member of the Steel Horse board of directors.