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City takes 20% off top of money earned by nonprofits at U.S. Cellular Center events

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Part of the crowd at the 2014 Warren Haynes Christmas Jam, held at Asheville’s U.S. Cellular Center

The city actually deducts its share off the top of the gross amount it pays nonprofit personnel for working as extras during such high-draw events as the Warren Haynes Christmas Jam and various concerts by headline artists.

But at that, sources say adjustments made this spring to the city’s way of working with nonprofits are an improvement over the previous arrangement, under which the city was helping itself to nearly half of what nonprofits took home after an event. That figure, according to documents obtained by the Tribune, had reached nearly 50 per cent by 2012.

A little-known arrangement called the “nonprofit concessions program” has been in place for years – going back well before the Asheville Civic Center’s naming rights were acquired by U.S. Cellular center – the facility’s management, at its discretion and depending upon need, reaches out to various nonprofits and invites them to provide additional personnel for special events. The USCC maintains a list of preferred nonprofits for this purpose, though it encourages nonprofits not on the list to apply. Nonprofits who are aware of the program make “getting on the list” a priority.

Nonprofits tapped to provide extra staffers “receive 10% of the gross foods and non-alcoholic beverage sales; and 5% of gross alcoholic beverage sales; LESS ANY STAND SHORTAGES,” according to the most recent edition of the volunteer concession contract. These are flat rates and have remained the same for years.

However, USCC giveth and USCC taketh away. Twenty per cent is a substantial tariff and charging nonprofits anything at all is inappropriate, says Jonathan Roberts, a local consultant who has worked with local agencies to obtain USCC event gigs in the past.

“Why would you take anything at all from a nonprofit?” Roberts asked. You’re using their people and you’re supposed to be helping them. At least it’s not as bad as it was until they adopted these new rules. The current concession volunteer contract was revised in July, following an investigation and audit that took place after complaints about the city’s exorbitant cut.

Under the previous system, in addition to its 20 per cent cut, the city helped itself to 30 per cent of all tips collected during a given performance. That made for a total of 50 per cent of a nonprofit’s earnings.

The nightly counting and accounting method, according to previous narratives, was simply to take all tip jars that had been placed at various concession stands and bar areas to the USCC’s main office, pile the takings onto a table and divvy them up. “So after everything was counted at the end of the night,” Roberts says, “the nonprofit would literally be given its share of tips in a sack and told, “Here’s your cut.”

The 30 per cent taken from the kitty at that point went to the USCC’s own personnel, who were already paid employees – in part, it was said, to compensate those workers for their extremely low wages. In a 2014 memorandum to USCC management, Roberts alleged:

Unfortunately, in 2012 the concessions manager made a unilateral change to this program, instituting a policy taking away 44 cents on every dollar in cash tips earned by these hardworking nonprofits. This money was supposed to be redistributed to staff at the Civic Center. The change, admirable in its attempt to provide a pay bump to these workers, came at the expense of donations given by the public in good faith to charitable organizations. It’s a classic case of robbing Peter to pay Paul, except in this case Peter is a nonprofit dedicated to helping veterans and Paul is a city worker barely making minimum wage.”

This process was overseen for many years by USCC food and beverage manager Karen Gillespie. In his memo, Roberts complained that Gillespie was running her department “like her own personal fiefdom without the direct oversight of the Asheville Civic Center Commission. This has led to a lack of transparency, fairness and accountability in the process of how these nonprofit organizations are selected.”

Roberts concedes that on this point he had a substantial axe of his own to grind: at the time he was representing Habitat for Humanity and tried, on behalf of that organization, to persuade Gillespie to employ Habitat volunteers to work that year’s Warren Haynes Christmas Jam.

“But she said ‘We’ve already got enough nonprofits,’ Roberts said. “And the thing is, of course, Habitat for Humanity is who the Christmas Jam benefits. Amazing.”

The April 29 “special consulting request” that shone a light on USCC finances and operations resulted in the elimination of all tipping, considering that regular civic center employees have since benefited from “living wage” pay increases, and also caused a “re-examination” of hiring practices.

Shortly after the analysis was conducted, Gillespie resigned. She had held her position for sixteen years and would have been eligible for full retirement in four more. In 2014 she received an Asheville Way award for outstanding leadership.

The April analysis stopped short of following the money trail backwards through all the years of paper-bag tip distribution. The total amount of money unaccounted for in terms of dispersal has been estimated at between $75,000 and $300,000.

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