The City of Austin is reconsidering the future of its $25 million arts grant contract with the Long Center after an internal audit — which followed the reporting by Austin Current — prompted new scrutiny.
The city says it will make changes to the financial arrangement with the Long Center, which scores applications and distributes grants to hundreds of artists each year, placing fresh pressure on a program that has already drawn questions about transparency and oversight.
Austin Arts, Culture, Music and Entertainment, the city division that oversees the grants program, found “opportunities for improvement, which are currently being implemented,” said Morgan Messick, the department’s assistant director.
The Long Center will keep its contract through 2028. But the audit has introduced new uncertainty about what comes next.
The city may go a different way, potentially ending the Long Center’s role in administering one of Austin’s largest cultural funding streams.
“Moving forward, as the contract period ends, ACME is considering launching the ‘Request for Proposal’ process in order to consider all options for a third-party administrator for the grant programs and also exploring the possibility of bringing the grant administration process back in house,” Messick said.
Long Center CEO Cory Baker said in an email to Austin Current, “We fully endorse the City’s plan to ensure these programs are administered as efficiently and user-friendly as possible, whether that is through our organization, another vendor, or AACME. We remain confident that we are the strongest partner for both the City and its grantees.”
As of press time, neither city leaders nor Baker were able to provide details about what the audit revealed or what specific changes are planned, leaving key questions about the program unanswered.
Audit sparked by questions about contract structure
The city audit was triggered in February after Austin Current asked questions about the structure and rates authorized under the contract, bringing new attention to how millions in public funding are managed. Under the existing agreement, the Long Center administers and distributes payments to grant winners including musicians, filmmakers, dancers and visual artists.
But unlike many other contracts, the administrative fee is not a set percentage. It is based on hourly rates for services performed, a structure that can complicate oversight and obscure total costs.
Some of those rates include: $250 an hour to retrieve data for the city; $250 an hour to train panelists how to judge grant applications; $87 an hour to administer payments to panelists who review the grants; and $54 an hour for customer service. Such figures underscore the granular, task-based billing approach.
Justin Marlowe, a research professor at the University of Chicago Harris School of Public Policy, told Austin Current that the structure of the Long Center contract was, though not unique, unusual. Most contracts of these types set a flat percentage for overhead, he said, offering clearer expectations for both cost and accountability.
Hourly billing per task is far more labor intensive, he said, taking more oversight, more review time and closer scrutiny of what the city is paying for. That raises the stakes for how closely the contract should/must be monitored..
Sharron Anderson, a member of the city’s Arts Commission who has previously raised questions about how the Long Center handles the grants, said she is glad the contract is being reviewed.
“I look forward to hearing about the internal review at the next Arts Commission meeting,” she said.
A funding system under new scrutiny
Since 1981, the city has directed Hotel Occupancy Taxes to fund grants for cultural artists. The move has embedded public support for the arts into Austin’s economic model. The tax generates more than $20 million a year for cultural arts grants.
Then, in 2019, the Live Music Fund was born. A new city ordinance dedicated hotel occupancy taxes to support musicians, independent promoters and live music venues, expanding the scope and scale of the city’s cultural investments. Artists use the money to pay their bands, record albums, cover stage rental and fund other needs.
The city hired the Long Center in 2023 to score applications, keep data and oversee contracts with artists. That placed the organization at the center of a rapidly growing funding system. Between 2023 and earlier this year, the Long Center had distributed approximately $49 million in grants and received $3.2 million in administrative costs.
In March, the city announced $24 million in grants for artists, continuing the flow of public funding even as questions about oversight persist.
How the city will ultimately reshape its contract with the Long Center has yet to be seen. For now, the Long Center is trying to prove it’s worthy of the work, even as the city signals it may reconsider who manages the funds.
“We look forward to continuing to demonstrate our role with clarity, transparency, and a commitment to continuous improvement,” Baker said. “When Austinites engage with arts and culture, our entire city benefits, and we are proud to serve a community defined by such purpose, creativity, and character.”
