Audit: City Was Not Paid in Full For Snapple Deal
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Comptroller William Thompson Jr. is calling for increased scrutiny of the city’s marketing arm after his office released an audit yesterday that found the agency has failed to pay the city more than $235,000 in commissions from its deal with Snapple.
Mr. Thompson, who has sued the city over its $126 million contract with the beverage maker, released his audit on the same day as the city’s Franchise and Concession Review Committee considered an amendment to reduce the sales goals steeply in the Snapple deal. The Marketing Development Corporation announced last month that its initial revenue projections for the agreement were too ambitious and would have to be scaled down. The amendment would reduce the value of the deal to $33 million. Citing the audit findings, the comptroller called the marketing corporation’s payment system “arbitrary and lacking in focus,” saying the agency needed improved oversight.
The Marketing Development Corporation disputed Mr. Thompson’s findings, saying in an official response that it had worked out with the city’s budget office procedures for paying commissions on Snapple revenues, and that it was keeping some funds on hand to pay for upcoming expenses. “It is reasonable and prudent to retain enough cash for our ongoing operations,” the corporation’s finance chief, Kevin Booth, wrote in a letter to the comptroller’s office.
The corporation president, Joseph Perello, told the review committee yesterday that it had already made $5.7 million in payments to city agencies from the Snapple revenue, in addition to generating $50 million in promotional value through its various marketing partnerships.
Mr. Thompson was not satisfied. “It’s almost as if they are taking credit for everything except the founding of New York City,” he said in an interview. He said the revenue should be disbursed through the city budget process.
The review committee also heard testimony from supporters and opponents of a $168 million water park proposed for 26 acres of Randalls Island. The committee is expected to give the park final approval in a vote today.
