MANSFIELD -- Money that the city gave to the Mansfield Area Chamber of Commerce the past five years for the Pecan Festival and for tourism was used instead to pay for other chamber expenses, according to documents obtained by the News-Mirror, the Star-Telegram's weekly newspaper in Mansfield.
Itemized receipts submitted by the chamber to the city show the funds were used for property tax bills for 2007 and 2008, repairs and renovation of the chamber building, portions of staff salaries, security monitoring, pest control and beer and wine for an after-hours chamber event.
"There appear to be quite a number of instances when the chamber sought reimbursement for expenditures that may not have been consistent with the City Council's expressed intent when they made the allocation," said City Attorney Allen Taylor. "They appear to have exercised an extremely liberal interpretation of the council's intent of expenditures."
Jeff Uhler, chairman of the chamber's board of directors, did not return calls Tuesday.
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In an e-mailed statement, chamber president Lucretia Mills said, "We are providing the city with additional requested documentation on the Pecan Festival hotel/motel reimbursements."
The city began examining the expenditures after the News-Mirror raised questions about $30,000 in hotel/motel tax funds allocated for the Pecan Festival. The chamber had canceled the 2011 festival, but the city did not know what had happened to the money.
It then began an audit of receipts submitted and found other itemized expenses over the past decade that raised concerns.
"On its face, it appears to be possibly a commingling of funds in one general fund," Taylor said. "The hotel/motel funds have to be in a separate account. You have to track them to see that they are used for heads to beds."
The hotel/motel tax funds are to be used only to generate tourism and the convention and hotel industry, according to the Texas Tax Code. Among those uses is historic preservation, visitor information centers, promotion of the arts and programs that attract tourists. One section does allow for day-to-day operations, supplies, salaries, office rental and other expenses for a visitor center.
"If you can pay rent, then by definition you are paying property taxes," Taylor said. "But they could only charge off a piece of the taxes and building note. You could never charge all of it. It's a pro-rated expense."
However, City Manager Clayton Chandler said he doesn't believe there appear to have been any illegal expenditures. "But we've got to give some serious consideration to the council's intent," he said.
The chamber, which has received almost $250,000 from the hotel/motel tax fund since 2005, submitted its $5,988.85 property tax bill in 2008 and $5,503.42 property tax bill in 2007 for the hotel/motel funds.
The city's 2009-2010 allocation to the chamber specified $50,000 was for producing the Pecan Festival and $20,000 was for tourism. Previous year's allocations simply stated the funds were for the chamber.
The 2010-2011 funds were designated for the Pecan Festival, formerly the Hometown Celebration, which has been held the last weekend in September for the past 25 years. In March, the chamber announced that it had decided to cancel the 2011 festival. Yet the chamber already had turned in receipts for the full $30,000 and was reimbursed in December, according to the receipts.
Peter Phillis, the city's director of business and support services, said it wasn't unusual for the chamber to turn in expenses in a lump sum.
The question then arose as to whether the funds were intended as reimbursement for the 2010 event, which was rained out after two hours, or for the 2011 festival.
"The goal was to provide tourism and the continuation of the event," Chandler said. "It's fair to say there is disappointment in a review of some of the expenses. The City Council intended the money be spent for 2011 festival."
On the chamber's application for the funds, it stated that the funds were to be used for the Sept. 25, 2010, and Sept. 24, 2011, festivals.
Chandler asked Taylor to do further analysis of the chamber's expenses, meet with chamber representatives and present the review to the council within the next 30 days. He said the chamber was cooperating with the city.
If the review does show "an unacceptable variance," Taylor said, "we would expect the chamber to reimburse the city. We have a legal obligation to recover the funds and use them on appropriate expenditures."
Mayor David Cook said he would wait to see Taylor's evaluation.
"I have serious questions on whether the expenditures meet the council's intent," he said.
Future allocations from the fund will be a lot more specific, Taylor said.
"We need a massive reorganization with how we deal with any third party we allow to use these funds," he said. "We need producible results sheets. What are they going to do with the funds? And hard timelines on when deliverables are due. We were trying to make it easy and friendly. We are learning they were given too much rope."
Amanda Rogers, 817-473-4451