Dozens of city nonprofits benefiting from your tax money

The exterior of the Philadelphia Museum of Art, main building.
The exterior of the Philadelphia Museum of Art, main building. (Philadelphia Museum of Art Official Site)
Posted: April 18, 2012

THE PHILADELPHIA Museum of Art has dough.

It enjoys a $360 million endowment. A dozen top employees make six-figure salaries, including museum CEO Timothy Rub, who brings home $450,000 annually.

The city still chips in, though. It gives the museum more than $2 million a year for security and upkeep of its city-owned buildings, in addition to money for capital projects.

So you wouldn't think taxpayers would need to foot the bill for the museum's utilities. But they do. The city pays about $3.4 million each year for the museum's electric, gas, steam and water bills.

This isn't unique. In fact, the city spends about $4.4 million annually for the utility bills of nonprofits like the Art Museum.

The nonprofits that get this hookup include big institutions like the Mann Center, whose utilities cost taxpayers about $111,000 annually, as well as little-known groups like the Holmesburg Fish & Game gun club.

Recipients of this luxury argue that the city is making a wise investment. While not all nonprofits enjoy the break, at least 50 lucky institutions do.

How do you get lucky? There's no city policy guiding who gets free utilities and who doesn't. Many of the arrangements were made decades ago by long-gone administrations, so it's hard to say for sure. But consider the case of one North Philadelphia homeowners association.

Residents of the privately owned Jefferson Manor Townhouses share a quad, parking spaces and a few alleys. The city has been picking up the tab for this shared area's utilities since 1988, when former Mayor W. Wilson Goode Sr. signed a bill transferring the property to the city. The bills cost taxpayers about $4,000 each year.

Paula Taylor Peebles, then-president of the Jefferson Manor Community Development Corporation, says that the city began paying the utilities simply because homeowners didn't want to. She says that the late Sam Evans, a political kingmaker, fought for the hookup.

Zack Stalberg, president of the government watchdog Committee of Seventy, says that the city should adopt a clear policy about paying for utilities. Otherwise, taxpayers won't be protected.

"I know it's hard to believe, in Philadelphia, that there would be cronyism and favoritism and special deals," he says, "but that's what tends to happen when you don't have a very clear policy."

Critics also question whether the city can afford to keep footing these bills.

Laura Otten, director of La Salle University's Nonprofit Center, whose mission is to empower local nonprofits, says that she is "a little bit outraged and a lot surprised" by the fact that the city pays millions for institutions' utility bills.

"How many more police officers, firefighters could that put on the street?" she asks.

Otten argues that the breaks could give an unfair advantage to politically connected institutions.

But Mark Focht, first deputy commissioner of Parks & Recreation, defends many of the breaks. He argues that in several cases the city is paying for utilities because nonprofits are spending serious dough to maintain city buildings.

"The Boys & Girls Club up in Tacony Creek Park, they've made a quarter-million dollars in capital improvements into a city-owned building," he says.

Focht also points out that the Art Museum raises private money to maintain its city-owned properties, which it leases for free.

Art Museum president Gail Harrity argues that the city is using its money well. She also says that the museum is taking care of some city-owned art collections.

"The museum's economic impact on the city is vast," she says. "On average, for every dollar invested or spent in the museum, there's a four-dollar return in revenue for the city."

Focht admits that he doesn't know if the deals negotiated before his tenure "would stand up against criteria that may be imposed today." He says that as old agreements have come up for renewal, Parks & Rec has pushed nonprofits to start picking up the tab.

Robert Allen, a Parks & Rec director, says that some Council members have gotten involved in the past when the city has moved to make nonprofits pay utility bills.

Last year, Mayor Nutter charged a task force headed by former mayoral candidate Tom Knox with examining city facilities. One of its goals is to come up with a policy governing the breaks for nonprofits.

"What we're trying to do now is find out why we're doing it, and who deserves it and who doesn't," Knox says.

Knox's recommendations to Nutter are due next year.


 


Holly Otterbein writes for It's Our Money, a joint project of the Daily News and WHYY funded by the William Penn Foundation, that works to shed light on where your tax dollars are going.


Contact Holly at 215-854-5809.

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