September 29, 2009
The Hogle Zoo was sitting on a gold mine.
Salt Lake County voters had offered the aging animal park $33 million for improvements — if the zoo could come up with $11 million on its own.
Zoo officials made no secret of their discontent with the deal; they wanted the money with no strings attached. But they believed Hogle would have the cash well within the two-year fundraising window mandated by the County Council.
Then the economy tanked. A $3 million pledge from Utah’s George S. and Dolores Doré Eccles Foundation was put at risk when Hogle couldn’t raise enough matching funds. And with endowments crippled by the financial crisis, other foundations were devoting their resources to human needs.
It was under these circumstances that zoo director Craig Dinsmore decided Hogle needed to “get creative in our fundraising,” according to recordings of a meeting with the county’s debt review committee obtained by The Salt Lake Tribune under Utah’s public records laws. Dinsmore called Denver-based Service Systems Associates (SSA), a concessionaire with a reputation for making generous gifts to the animal parks with which it did business. It had been unable to seal a deal with Hogle in past years.
“I contacted SSA — the president of SSA — directly and asked if he was still interested in Hogle Zoo as a business partner,” Dinsmore told the committee earlier this month. “The answer was ‘Absolutely, always had been.’ I said, ‘Are you interested enough to put some significant money toward helping us with our capital campaign and our improvements?’ ”
A few days later, the deal was made. SSA would donate $2.5 million over 10 years. And Hogle was set to reap its public windfall.
“Creative” fundraising » When Hogle came asking for its millions in taxpayer funds last week, Councilman Michael Jensen asked if the SSA deal amounted to a “pay-for-play” pact.
Dinsmore dismissed that notion. He told the council SSA offered the donation because the better the zoo, “the better the opportunity they have to make money.”
The council didn’t ask about — and Dinsmore didn’t offer — how the donation was solicited nor the terms of the deal. It provides the private company with more than $3 million in equipment and buildings, some of which were paid for by Utah taxpayers.
But Councilman Jim Bradley, the county’s representative on Hogle’s board of trustees, said Monday that he wasn’t concerned about the arrangement. “This isn’t a situation where we’re giving away the farm to the concessionaire in return for $250,000 a year,” he said.
Bradley applauded Hogle’s “creative and innovative” fundraising, noting that the council had never stipulated how Hogle should raise its $11 million. He guessed the council will “overwhelmingly” vote to approve the bond.
Councilman David Wilde agreed the council will likely approve, but he still plans to raise questions about Hogle’s accounting.
Wilde said he’s troubled that the zoo has included in its fundraising calculations nearly $1 million that was raised and spent on the zoo’s Asian Highlands exhibit, completed years before the bond deal. He also doesn’t think that SSA’s pledge should be valued at $2.5 million, because it will be years before the zoo receives all the money.
And Wilde said that deal-making behind the SSA gift “just casts even more doubt into the legitimacy of the way the zoo is counting that money.”
Within the rules » In 2002, a legislative audit criticized the zoo for too many “related party transactions” — business arrangements with employees and board members that blurred ethical lines and left questions as to whether the park was getting the best service for the least cost.
The zoo’s trustees decided board members and employees could no longer contract with the zoo. But they did not prohibit giving contracts to big donors, so Dinsmore’s deal with SSA doesn’t appear to violate Hogle’s rules.
Jennifer Chandler, director of network support for the National Council of Nonprofits, said Hogle was smart to not limit corporate sponsorships, which are common in the nonprofit world.
“It would be wonderful if corporations would just give money away, but in this environment, that’s not always possible,” she said.
But Royce Van Tassell wonders whether taxpayers are getting the best value. The Utah Taxpayers Association vice president noted Hogle competitively bid its concessions contract in the early 2000s, when SSA came in second. Hogle later fired the original contract winner and managed concessions services in-house for several years.
“Now all of the sudden they feel no need to go through that competitive process,” he said. “What changed?”
Hogle has declined to answer such questions. Zoo spokeswoman Holly Braithwaite said last week that taxpayers already had their say when they overwhelmingly approved the $11-for-$33 million bond deal in November. Now, she said, the zoo will only answer the county council’s questions until a decision is made about releasing the money.
Van Tassell said the lack of transparency leaves taxpayers in the dark.
“Nobody knows whether this is the best deal the zoo could have gotten — and therefore nobody knows if this is the best deal the taxpayers could have gotten,” he said.