With tempers still flaring over Mayor Nutter's decision to stop using city dollars to cover the cost of parades and street festivals, one event has been quietly allowed to get a free ride: Welcome America, the nonprofit group that is host to Philadelphia's Fourth of July party.
In the days after last year's celebration of the nation's birth, Welcome America's executive director vowed to repay City Hall $300,000 for crowd control, cleanup, and police and emergency-medical services.
That commitment was in keeping with a new and controversial administration policy that requires organizers of the Mummers Parade, the St. Patrick's Day Parade, and other traditional events to absorb the costs for city services. It was adopted as city revenue plunged amid the global financial crisis.
"Absolutely," Welcome America executive director Melanie Johnson said at the time about repaying the city for expenses associated with the July Fourth parade, concert, and fireworks on the Parkway. "We're just like everybody else."
Not really, as it turns out.
In an interview this week, Johnson - who works for the Nutter administration as the city representative and as such is responsible for overseeing the new parade policy - said the $300,000 had not been repaid, and would not be.
Welcome America, Johnson said, is different from other nonprofit groups that sponsor signature city events, such as this weekend's gay-pride parade, the annual Steuben Day Parade, and the Mummers Parade.
"When it comes to the Fourth of July, it's not just a city event, but a national event celebrating the birth of our nation," she said.
Doug Oliver, the mayor's spokesman, agreed.
Oliver explained that given Philadelphia's budget troubles in early 2009, "the thinking was we can't be giving these services for free, and at that point, that had to be the case across the board."
The administration later reassessed its decision, and it concluded it should in fact financially support Welcome America because "all eyes are on our city on the Fourth of July to see how America's birthplace is celebrating America's birthday," Oliver said. "That's no small thing.
"The bottom line from our perspective," he continued, "is Welcome America deserves special consideration because it is the city's event."
Consequently, City Hall will also cover expenses for city services related to this year's Welcome America celebration, an 11-day festival that begins June 25.
Events during the celebration - which this year includes a free concert by the Roots and the Goo Goo Dolls - are funded primarily with corporate donations from Welcome America's sponsors. The main sponsor this year is Wawa Inc., which replaces Sunoco Inc. and will contribute $3 million over three years in cash and in-kind services such as water and T-shirts for volunteers. Other sponsors include Peco Energy Co., Bank of America Corp., the Four Seasons Hotel, and Dietz & Watson Inc.
But the administration's revised thinking to use taxpayer dollars to pay for police and other city services has raised some eyebrows. "If they need to be differentiating, they should apply an economic-benefits test to decide which events they should be supporting, and in a fair and transparent manner," said Malcolm Lazin, executive director of the Equality Forum, which aims to promote gay rights.
Last year, the city billed Lazin $18,000 for police and cleanup services during the organization's annual street festival on Market Street in Old City. Lazin avoided those costs this year by moving the festival to the privately owned Piazza at Schmidts in Northern Liberties.
Welcome America, whose chairman is now Nutter, was founded as a nonprofit group during the Rendell administration in 1993. It has been supported mainly by private donations it solicits and by city and state dollars.
But during Nutter's tenure, the organization's internal structure has changed.
Most significantly, it now falls to Johnson - a city employee - to run Welcome America.
In the latter part of the John F. Street administration, that job was handled by Tony-nominated actor Clifton Davis, who was paid $114,000 a year, and earlier by Lana Felton-Ghee, whose contract as executive producer awarded her about $76,000. The then-city representative had no similar role to Johnson's.
Reflecting the belief that Welcome America is ultimately a city event, Oliver on Wednesday said the administration in coming months would reevaluate whether it needed to remain a nonprofit group, or can or should become a line item in the city's budget. "If there is no sort of advantage to keeping it as a nonprofit, then changing its structure is something the city will take a closer look at," he said.
Since taking office, the mayor has pared down the festival's expenses, from roughly $3 million a year during the Street administration to about $2.1 million now.
Many of those savings stem from changes made by Johnson, including shortening the length of the parade, changing its location, and cutting construction costs to build the stage for the July Fourth concert by moving it from the Philadelphia Museum of Art steps to Eakins Oval.
Most recently, the nonprofit group did not renew a yearly contract with longtime legal counsel Lloyd Remick. It instead hired the Philadelphia firm of Schnader, Harrison, Segal & Lewis L.L.P., which is doing the work for less money as part of a contract that includes handling the Philadelphia Marathon and the Fund for Philadelphia, a city-funded nonprofit organization.
At the same time, Welcome America continues to struggle to raise money - a struggle that dates back years as sponsors have slipped away.
Under the Street administration, the organization received $1.8 million in city loans that were transformed into grants as Welcome America was unable to raise sufficient funds. Last year, the nonprofit repaid a $500,000 city loan it received with a $500,000 state grant.
This year, for the first time in the festival's history, it is getting no funding whatsoever from the state. Until now, Welcome America received between $500,000 and $1 million a year from the state legislature, and an additional $125,000 to $175,000 from the Governor's Office.
"It's a shame," Gov. Rendell said this week. But there's just no money for these type of economic-development projects, as we call them. . . . And it's painful to me, since I started Welcome America."