Don Smiley’s Ever-Higher Salary
His salary rose by $114,000, to more than $886,000, and the explanations keep getting thinner.
In today’s Milwaukee Journal Sentinel, Dan Bice reports that Summerfest just released data showing its CEO Don Smiley got a $114,000 increase in compensation in 2012, hiking his salary to $886,185.
That is more than three times higher than the compensation Smiley earned in his first year as Summerfest boss, in 2005. Smiley earns about $1 for every ticket sold to Summerfest, Bice noted.
Bice offered a “balanced” assessment of the salary controversy, writing that “Many at City Hall consider Summerfest a joint public-private venture, with the Summerfest staff acting as managers of a valuable piece of city real estate. Summerfest honchos, by contrast, see themselves as running a private nonprofit business.” Former Summerfest board chairman Dan Minahan told Bice that “The goal was to have Don fairly compensated. Just like other businesses.”
But it’s not a business. As I’ve previously reported, Summerfest is a tax-exempt, city subsidized non-profit that also gets millions of dollars in charitable donations. It was founded and created by the City of Milwaukee, it doesn’t pay a market rate for the 78 acres of prime lakefront land owned by the city that it uses, its facilities (estimated value of $88 million) were mostly financed by the city’s taxpayers, with additional funding coming from charitable donations. And it has used the city’s bonding authority to issue $25 million in tax-exempt revenue bonds.
As I’ve also reported, Mayor Tom Barrett and his chief of staff Pat Curley had a meeting where they expressed their concerns to Kellner, Minahan and Summerfest board member H. Carl Mueller. According to Curley, Kellner and company agreed that future decisions on Smiley’s compensation must be shared with public appointees to the board and also agreed that the city comptroller could examine the books of Summerfest.
City officials also intend to revisit Summerfest’s lease with the city, and may ask for a greater contribution.They may also revisit a provision in the lease which requires requires Summerfest to “develop and/or promote free or lower admission cost community events” on the Summerfest grounds.
Some members of the city’s Harbor Commission feel little of this has been done by Summerfest, Bice reported. But then, if you think you’re running a business, rather than a tax-exempt, city-subsidized charitable enterprise, why would it be necessary to serve the community with low-cost events?
What continues to amaze in the statements of Kellner, Minahan and Smiley is how tone deaf they seem. If they don’t wake up to the fact that the festival depends on the support of the community, its taxpayers and charitable donors, they might begin to see an erosion of that support.