Decouple utility fees from nonprofit funding

Wilson City Council has a proposal to terminate a program that has dogged council for years. If the plan is approved, the city will eliminate its contributions to the nonprofits by 2012. One of these nonprofits, the Arts Council of Wilson, would receive funding through the city's General Fund in recognition that the Arts Council operates a youth theater program that had been part of the city's Recreation Department.

This proposal from City Manager Grant Goings would get the city out of the business of funding nonprofits, but it will not eliminate the criticisms, as can be seen by online comments at wilsontimes.com. Some critics go apoplectic at the thought of funding the Arts Council or any arts-related organization. But funding of the arts in some form — programs, facilities or public art — is common among N.C. municipalities, which see these appropriations as beneficial to the community.

To understand how City Council got into this dilemma, a little history is necessary. Years ago, City Council made a business decision to impose a $10 late fee on utility bills paid after the due date. The late fee, despite its being a sensible and ubiquitous business policy, caused an uproar. (Try paying your credit card late and see what the penalty is!) To quell the criticisms, the city announced it would give away the late fee revenues to nonprofits. Thus, a standard business revenue stream became a charitable donation — and a political football. Council had difficulty each year dividing up the nearly half-million-dollar pool of late-fee revenues.

Who could blame City Council members for wanting this political hot potato taken off their hands?

Decoupling late-fee revenues from nonprofit funding should be the first step in fixing this simmering controversy. Late-fee revenues should be deposited in the utility fund and blended with all other utility revenues. Nonprofit funding, art funding, charitable funding should be based on merit alone. The city has no obligation to fund these services in the way the county, for example, has a legal obligation to operate a heath department. However, there is no legal barrier to the city funding nonprofits if it finds the nonprofit's services in the public interest and worth the cost.

I would suggest that the city (and county, if it's willing to go along) distinguish between local institutions that contribute to overall community assets and those charities that provide a worthy service. I would include in the first category the Boykin Cultural Center, the Arts Council, N.C. Baseball Museum, Imagination Station and the Round House Museum. These are assets that attract people to our community and contribute to the quality of life. Governmental funding is appropriate as a supplement to private donations and as a base for grant requests. The Tourism Development Authority should recognize the value of these assets and provide an annual revenue stream to them. Each attracts people to Wilson more consistently than the occasional events or interstate billboards in which the tourism group has invested the county's lodging tax.

Other nonprofits, which provide valuable services, might also receive some public funding. Wilson OIC, the Wesley Shelter, Hope Station, WCIA and other groups would fall in this category. But City Council is ill-equipped to judge which groups are most deserving or most in need of funding. If the city or county wishes to make contributions to local  charitable services, the decision of who gets how much would best be left to an organization such as United Way, which is geared to making those decisions and requiring financial statements that show both need and effectiveness. (And, by the way, to the critic at wilsontimes.com who claimed there were multiple six-figure executives at United Way, that might be true in some places, but not at Wilson County United Way.)

However the city spends its tax and enterprise fund dollars, there will be critics (many of them sadly misinformed or spewing malevolent disinformation). The city must decouple utility late fees from its nonprofit funding, then find a fair and defensible means of distributing the funds the people and their elected representatives find appropriate.