Fischer’s budget would cut spending on Derby guests by at least 20 percent

The view from Millionaires Row | Photo by Boris Ladwig

While the administration of Mayor Greg Fischer regularly spends over $100,000 entertaining prospective business guests at the Kentucky Derby each year, the mayor’s proposed budget would cut that amount by at least 20% in the next fiscal year, according to Louisville Forward Chief Mary Ellen Wiederwohl.

Wiederwohl told Metro Council members at a special budget committee meeting on Monday that while Louisville Forward typically is budgeted $300,000 annually for a “business development account” to attract companies to locate or expand in the city, that figure has been reduced by 20%, to $240,000, in Fischer’s proposed budget for the 2019-2020 fiscal year that begins July 1.

This business development account in recent years has been budgeted as an external agency expenditure through Louisville Tourism — and before that, Greater Louisville Inc. — which Wiederwohl said is used to pay for its Derby guests, plus other site visits, business attraction activities and GLIDE trips with the local chamber of commerce to other cities that members of the administration go on every year.

Wiederwohl said that if this 20% cut remains in the budget passed by Metro Council next month, expenditures on Derby guests would be cut by “at least that amount,” which would cause her economic development team to “look at the opportunities to increase private fundraising for that.”

Noting that Louisville Forward has regularly paid for its Derby Eve dinners for such guests through corporate sponsorships, she added that such private fundraising “has not been easy” and would be a challenge to expand next year for the rest of the weekend’s activities.

“It’s not that the corporate dollars are just sloshing around out there to go get that, but we are going to pursue other sponsorships to help support that effort,” said Wiederwohl, “because obviously — as you know from our previous discussions — we believe that’s a very important attraction component for the city.”

The administration has taken criticism in recent years for such spending on Derby guests, much of it focused on the administration’s refusal to reveal the identity of such prospective business guests, even from several years ago.

Fischer took additional criticism for continuing such spending for this year’s Derby during the current budget crunch, as the mayor chose to cancel a police recruiting class, close four outdoors pools and take other cost-cutting measures this spring to help fill what was once projected as a $35 million budget shortfall for the next fiscal year.

As first reported by Insider Louisville in April, the administration had already spent over $121,000 on this year’s Derby guests, including 32 “Millionaires Row” tickets for the Kentucky Oaks and Kentucky Derby, a block of rooms at the Omni Hotel and various transportation costs.

The city’s total tab spent on guests — including food, Derby eve party expenses and other miscellaneous costs — actually ended up as a lower total of nearly $116,000, as the administration picked up $26,000 of corporate sponsorships to defray costs.

Defending such spending at the time as the administration was cutting in other areas, Wiederwohl noted that these funds were already appropriated by Metro Council last year and that planning and spending for the 2019 Derby events began last fall.

She also noted that under the city’s current budget crunch, “it is important, now more than ever, to invest in revenue-producing activities like Derby and other economic development work because it helps grow our economy and ultimately our tax base.”

As they have in past years, Louisville Forward is not releasing the names of the 13 prospective business guests they entertained at this year’s Derby.

While Metro Council nearly passed an ordinance that would have forced the administration to release the names of these guests within five years, Wiederwohl criticized this transparency effort, saying it would have a “chilling effect” on their ability to entice prospective businesses to Louisville.

However, the department has released the names of the six city employees who attended the Derby festivities, plus the three local individuals — dubbed “cheerleaders” or “industry hosts” for the city — who help sell Louisville’s strong points to the business guests.

Louisville Forward spokeswoman Caitlin Bowling told Insider that most of the economic development guests also brought a spouse or plus-one to Churchill Downs.

The three city “cheerleaders” who attended the Derby festivities were Anthony Smith, the CEO of Cities United and a former Fischer administration official; Bridgette Johnson, the COO of New Directions Housing Corporation; and Hernan Mujica, the CIO of Texas Roadhouse.

The city employees who attended the Derby were Fischer, Wiederwohl and four other Louisville Forward officials from its Economic Development team, including director Rebecca Fleischaker and managers Benjamin Moore, Sierra Enlow and Alex Mercer.

This story has been updated.