Lewiston Finance Director Heather Hunter at Tuesday night’s city council meeting at City Hall in Lewiston.
LEWISTON — The City Council voted unanimously Tuesday to spend just over $17,500 on police patrols and other support for the Great Falls Balloon Festival — the largest city expenditure for a nonprofit event — without hearing publicly from the city’s finance director about what she found looking into the festival’s finances.
Finance Director Heather Hunter said after the meeting that she’d been prepared to tell the council that she found no improprieties but did have some recommendations for ways the festival could better document procedures, deal with bank reconciliation and capture information on balloon launch tickets.
Mayor Robert Macdonald said Hunter’s report wasn’t on the agenda, so the council didn’t know she was prepared to speak. Asked whether the council would have been interested in hearing from her, he said, “I suppose so, yeah.”
Deputy City Administrator Phil Nadeau said councilors were likely aware that someone connected with the festival had raised concerns with him about the festival’s management because it was published on the front page of the Sun Journal in March. He said balloon fest funding was on the agenda, grouped in with city funding for all nonprofit events, and councilors could have asked Hunter questions about it if they wanted.
“That’s sometimes the way these things go,” Nadeau said. “We prepare for everything. We try to prepare for everything. It just didn’t happen.”
Nadeau said he hadn’t heard from any elected officials asking about the festival’s financial management.
The balloon festival spans Lewiston and Auburn and is one of the area’s biggest and most popular events, drawing tens of thousands of people to the Twin Cities during a single weekend in August. More than 30 nonprofits sell food at the festival or otherwise rely on it for a large chunk of their annual fundraising.
The festival is run by a board of volunteers and has long been considered a 501(c)(4), a nonprofit that is tax-exempt even though donations are not tax-deductible as they are with a 501(c)3.
The festival is funded through sponsorship, donations and the sale of souvenir items. It also makes some money on passenger balloon rides and the fees it charges for-profit vendors who have booths at the event and on nonprofits that sell food or other items.
The city lets the festival use Simard-Payne Memorial Park and spends money each year on police patrols, Public Works assistance and other help.
In March, someone connected with the festival contacted Nadeau and raised concerns about the event’s financial management. Those concerns came just weeks after three of five festival board members abruptly quit — two of whom told the Sun Journal they left because they were worried about the way the festival was being managed.
At the same time, a number of entertainers and businesses — including the festival’s insurer — said they’ve had to chase longtime treasurer Mell Hamlyn for months over payment and only recently got checks for work they did during the festival in August 2016.
There were also questions about the festival’s nonprofit status.
Hamlyn, who was one of only two board members left after the resignations, has called the allegations of mismanagement “unfounded.”
Nadeau agreed to examine the festival’s finances because the city spends so much taxpayer money on the event. Although the city helps support a lot of nonprofit events, this was the first time it examined a group’s finances.
Hunter did the review.
Nadeau emphasized Tuesday that it was not a forensic audit.
“That’s not what our charge was,” Nadeau said. “Our charge was to take a look at what (the festival) presented to us and make a determination as to whether or not we could determine if anything seemed out of order to the extent that maybe something like that might get found.”
He said the review did not turn up any red flags.
“We did what we could to answer the question and we feel at this point there’s nothing to report out that would suggest anything that we could discover that was of concern for us,” Nadeau said. “That’s about as good as it’s going to get at this point.”
After the meeting Tuesday, Hamlyn said she felt vindicated by the board’s vote to support the festival.
“The prior articles/reports led the fine people of this community to believe I had acted in a manner that was inappropriate,” Hamlyn said in an email. “This put my professional and personal reputation in question.”
She said she spoke with Hunter about her findings.
“Heather’s report showed that after a full city review, there were no improprieties,” Hamlyn said. “Any suggestions made to make changes will certainly be reviewed by myself and the board as we are always looking to improve how things operate.”
The council voted unanimously to spend just over $51,000 to help support nonprofit events. The balloon festival was the largest expenditure. The Liberty Fest was the second-largest at almost $12,000, including $10,000 in cash. The Dempsey Challenge was the third-largest at about $8,700.
A pair of balloons do a splash and dash in the Androscoggin River during a morning launch at the 2016 Great Falls Balloon Festival.