City staffers are scrutinizing a $25 million contract with the Long Center after Austin Current interrogated fees tied to Austin’s cultural arts grants program, raising questions about transparency, oversight and how public money is being spent.
The Long Center for three years has run the City of Austin’s cultural arts grants program, which is annually funded by millions of hotel occupancy tax dollars and is meant to support musicians, performers and arts organizations.
Austin Current’s review of the contract raised questions about how much money the city is paying for specific services. Some of the hourly rates listed in the agreement 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 pay panelists who review the grants; and $54 an hour for customer service.
Those questions have prompted action from the Austin Arts, Culture, Music and Entertainment (AACME) division, which oversees the contract.
“The department is undertaking a structured review of the Long Center agreement to ensure it aligns with current operational needs, performance expectations, and community priorities,” AACME director Angela Means said in a written statement. “This includes clarifying service delivery, transparency practices, and administrative processes associated with the contract.”
The outcome of the review could determine whether the city rewrites the contract, renews it as written or pulls grant administration back in-house.
Why this review matters now
The fees and duties are spelled out in the contract. The review is a “normal and appropriate” part of public oversight, said Cory Baker, the Long Center’s CEO.
“Our shared goal has always been responsible, transparent stewardship of public funds in a way that best benefits artists and the community,” she said.
The contract scrutiny comes as artists face mounting financial pressure. Austin’s high cost of living is driving musicians out of the city in search of affordable housing, and the grants are intended to help preserve Austin’s live music culture in the face of rising costs.
Last year, the city did not distribute most of its cultural arts grants. AACME, which had just been formed, paused the funding to hold community meetings, perform surveys and examine application procedures. That move left many artists without expected support and heightened scrutiny about how the system now operates.
The city’s Economic Development Department developed the contract and oversaw it before AACME was created in 2025.
The Long Center is currently running the grant application process for the Live Music Fund, through which $7 million is expected to be doled out to musicians and venues. The grants are slated to be awarded in March.
The center’s contract with the city is also up for a third extension renewal in April. Baker said the Long Center’s work has been both effective and transparent.
“The Long Center’s administration of city grants reflects a model that is both efficient and accountable,” she said. “Administrative costs are kept low, under 7%, ensuring the vast majority of funding goes directly to artists, while any additional revenue is also reinvested back into supporting artists.”
The very existence of cultural arts grants has been applauded from its start. Some groups, including the city Music Commission, supported hiring a third party to manage them. Others argued the city should have kept the grant program in-house.
For musicians waiting on checks, the grant administrator affects how quickly and how much money reaches them. The Long Center has been praised for speeding up payments. When the city ran the program, artists waited an average of 94 days, Baker said. Under the Long Center, that timeline has dropped to 10 days, she said.
But the center’s costs have drawn public scrutiny. Sharron Anderson, a member of the city Arts Commission, questioned the Long Center and city staffers in a meeting last year about specific charges in the contract.
Anderson said she is confident AACME will take the review seriously.
“They inherited this third-party relationship, and it’s up to them to determine whether it meets their standards,” she said.
Nagavalli Medicharla, a singer and chair of the Austin Music Commission, supports the city review.
“Even if it’s a one-off review, especially with the department being new, I don’t see anything wrong with that,” she said. “If something needs to be looked at closer, that’s due diligence. I think it’s a good thing.”
An ‘unusual’ contract structure
Rather than setting a lump sum, city staffers and the Long Center divided the contract by duties to reflect what Baker described as “transparent, task-based accounting of the actual work required to administer large-scale public grant programs responsibly.”
That structure shapes how much the city pays for each service. Contract fees are calculated using a blended rate model that includes portions of employee salaries for each task performed.
That structure is unusual, said Justin Marlowe, a research professor at the University of Chicago Harris School of Public Policy.
Most contracts set a flat percentage for overhead, he said. Dividing work by task and estimated hours requires more oversight, more review time and closer scrutiny of what the city is paying for.
The city’s contract with the Long Center contains multiple ways to exceed those estimates, said Marlowe, after reviewing the document for Austin Current. If contractors can show they need more hours to complete the tasks, the city pays more, he said.
“At that point, you, as the city, need to start saying, ‘Well, explain to us why it was exactly five hours on that, why it was 10 hours on that,’” Marlowe said. “If you’re not prepared to do that, then you run the risk of these estimates being blown out of the water when you actually get the invoice from the contractor.”
The Long Center won its first contract to run the city’s cultural grants program in 2023. The nonprofit arts organization, whose Riverside Drive campus hosts groups such as the Austin Symphony and Ballet Austin, was the only bidder in an open procurement process. Its duties include processing grant applications, tracking data, monitoring how recipients use the money and overseeing the technology that allows artists to apply for money online.
The contract, which has been extended twice and includes two remaining extensions, covers grants for programs including the Live Music Fund, Thrive and Elevate.
Since 2023, the Long Center has distributed approximately $49 million in grants and received $3.2 million in administrative costs, Baker said.
The center keeps its administrative fees low by calling on its 60-plus employees to help with grant-related tasks, Baker said. That approach was built into the contract from the start.
There are 4.5 full-time equivalent positions devoted solely to the contract at a cost of $415,000, she said. Other employees – including staff from marketing, accounting, community programs, as well as the chief financial officer and Baker herself – work on the cultural arts grants as part of their regular duties when needed.
“This model was anticipated from the outset of the contract and reflects the level of coordination and expertise required to responsibly manage public funds,” Baker said.
How the Long Center sets its rates
Based on his experience with contracts, Marlowe said the Long Center’s rates appear high for the work described. Baker, however, suggested the Long Center’s work looks simpler on paper than it is in practice.
The $250 hourly rate to pull financial and data reports includes maintaining the database, analyzing trends and preparing reports for city staff and commissions. Each step requires careful review, Baker said.
The $250 hourly rate to train community panelists to judge applications covers instruction on the grant software and program-specific requirements, she said.
Long Center staffers also attend city training sessions and have developed video tutorials for panelists, Baker said.
The Long Center charges the city $54 per hour for customer service related to less complex work such as administrative support and paperwork.
“These tasks require less senior involvement and therefore carry a lower rate,” she said.
But the Long Center’s overhead has drawn public scrutiny. In a June 16, 2025 Arts Commission meeting, Anderson, one of the commissioners, pressed the contractor to explain the administrative costs.
Bobby Garza, then-chief programming officer at the Long Center, explained how the rates were calculated and said the nonprofit was committed to fiscal responsibility.
“Because we’re concerned about making sure that we have a level of transparency and completeness with our processes,” he said, “we’ve independently started a third-party audit to make sure that our financial processes, our contracting processes and the way that we steward the city’s money is up to snuff.”
Seven months later, when Austin Current asked to see that audit, it did not exist.
“The Long Center is actively evaluating the scope and timing of a program specific, independent attestation, which is not required by law or contract,” Baker said. “We are currently discussing this evaluation with our external auditors to ensure it aligns with grant cycle timelines and provides meaningful insight.”
Medicharla said she thinks it’s important for the city to stay on top of concerns or questions with the cultural arts grants.
“This is public money,” she said. “It’s our taxes.”
