The mayor’s special Kentucky Derby party guests had fresh cookies and bonded bourbon, braised lamb and cactus salad.
They stayed at the brand-new Omni Hotel and were chauffeured to the track, where they watched two days of races from the swank sixth floor Skye Terrace. A professional photographer captured the whole experience: photos paid for by taxpayers, but unlikely to ever be seen by the public.
Louisville Mayor Greg Fischer’s invite-only Derby weekend extravaganza cost taxpayers about $109,000 this year, according to city records obtained by the Kentucky Center for Investigative Reporting through an open records request. But the mayor's office keeps the guest list secret, and has consistently refused to provide any details about who his guests are or what they do.
City officials have spent a total of $390,000 on Fischer’s private Derby events since 2015, records show.
Government transparency experts criticize the lack of disclosure about who benefits from the spending of public money. And Fischer’s political opponents say the cost “seems excessive.”
But city officials say the investment is money well spent, and the privacy is necessary.
“Derby is a unique opportunity for us to show off our city to prospective businesses looking to locate or expand here,” said Jean Porter, the mayor’s spokeswoman.
This year’s two-day soiree cost nearly $17,000 more than last year’s event.Though hotel costs dropped about $13,600 after a move to the Omni, horse race ticket costs climbed about $16,000.
But it was still less than the city spent in 2016, when gifts for guests, a customized app and refreshments at the hotel and race track added up to more than $112,000.
City officials secured fewer sponsorships and reimbursements for this year’s affair, according to the records. While guests have occasionally reimbursed the city for track tickets in past years, no one did this year. But a pair of $10,000 sponsorships from law firm Skoll Keenan Ogden and Beam Suntory helped offset some costs, the records show.
City: business development requires secrecy
Porter said guests’ name are kept secret because “this is the cultivation phase of development.”
“That phase almost always happens behind the scenes,” she said. “Disclosing their visit could tip off competitors, influence financing options or even affect a company’s stock if word slips it’s eyeing an expansion or investment in Louisville.”
But that justification for withholding guests’ names is “pretty thin,” especially since the guests know who else is in attendance, said John Wonderlich, the executive director of the Sunlight Foundation, a nonpartisan, nonprofit organization that advocates for government transparency.
“There is only one set of people that get to understand who is working with the city, and the public gets left out,” he said. “That just seems inappropriate.”
Wonderlich said a private meeting between city officials and representatives from a single company wouldn’t necessarily need to be disclosed. But larger scale gatherings that span days and cost significant amounts of taxpayer funds are a different story.
“At some point it’s not a private negotiation that’s about just promoting the city,” he said.
The public has a right to know who the guests are — if they’re campaign contributors, if they have relationships with city officials, Wonderlich said.
Wonderlich said cities are beginning to face more scrutiny related to how they pursue private companies looking to expand or bring development. He pointed to Amazon’s recent effort to solicit bids from cities interested in hosting their coming expansion. That led to cities offering extraordinary pleas and deals to the company.
Aaron Scherb, director of legislative affairs for Common Cause, a national watchdog group, said government officials serve on the taxpayer’s dime and the public has a right to know who is trying to influence government — and what deals are ultimately made with those individuals and companies.
“Without knowing who is on the mayor’s list of attendees, we’re just left in the dark,” Scherb said.
Councilwoman Angela Leet, who is running against Fischer in the upcoming general election, said the Kentucky Derby is obviously an asset and an opportunity to attract business.
“But you have to be accountable to the taxpayers,” she said.
She said the costs associated with the events are “excessive” and the names of guests should eventually be made public. And she questioned whether the event is effective for business development. She said business leaders should be courted in more individualized settings.
“They want to be the center of attention,” she said.
City purchasing policy requires all purchases greater than $20,000 to be made via certain processes: competitive bidding, competitive negotiation, an approved contract or a non-competitive negotiation.
Porter, the mayor’s spokeswoman, said all the expenses were under the city’s small purchase threshold except the more than $72,000 for Churchill Downs tickets, which can only be bought through Churchill Downs.
But records show another purchase exceeded the $20,000 threshold: the guests’ Omni Hotel rooms cost nearly $30,000, the records show.
Porter said the Omni Hotel purchase “went through [Louisville Convention and Visitors Bureau] bid process like any convention/meeting does.”
A spokesperson for the bureau did not immediately respond to a request for comment.
As costs rise for some elements of the annual Derby party — like tickets, parking passes and cookies — other costs stay flat.
“We negotiate the best price with as many local vendors as possible,” Porter said.
For instance, photographers have earned $950 — no more, no less — each year, since 2015, the records show. And chartered guest transportation to and from the racetrack has remained a steady $5,000 fee each year, though this year included a $250 tip.
City officials have also nixed some accoutrements, which have led to fewer expenditures. In past years, city officials bought souvenir cups from Louisville Stoneware and footed the bill for drinks and food at the Galt House. This year, the city did neither.
In 2016, city officials spent $5,000 for an App designed by local tech company Interapt. The city reused it this year and paid $103 to update it.
This year, customized magnetic name tags cost taxpayers more than $300, less than the city spent in previous years.
With rain in the forecast, city officials did make one unplanned expenditure. Someone took a last-minute trip to Dollar Tree to pick up dozens of umbrellas and plastic bags - a cost of $213, records show.
Reporter Jacob Ryan can be reached at jryan@kycir.org and (502) 814.6559.
