The directors of Maryland Preakness Celebration Inc. yesterday tightened controls on spending for the 1996 events -- an effort to prevent a repeat of this year's overspending, which left the group nearly $1 million in the red.
The board, however, is still developing a strategy for paying more than 120 creditors, including businesses, individuals and government offices, some of which were paid this year with checks that bounced or checks on which payment was stopped.
The meeting was the second time the board has met since revealing June 14 that this year's budget was overspent by nearly $1 million, that it had suspended executive director Donna Leonard and that it had turned the matter over to the Maryland attorney general's office for possible investigation.
"We're moving toward a position of absolute, rigid financial control over events, to demonstrate to the sponsors, state and city our oversight over financial affairs and dispersal of funds," said Robert D. Shannon, a regional vice president of Coca-Cola Enterprises who is co-president of the board.
Preakness Celebration -- a nonprofit group that arranges events around the running of the Preakness Stakes horse race in the name of economic development -- receives $50,000 from the state and another $75,000 from the city, in addition contributions from to its corporate sponsors.
Mr. Shannon said that, unlike the past -- in which the executive director had full authority to write checks and contract with vendors with little or no oversight -- members of the board in the future will be in charge of overseeing the finances of each of the week's events.
"There will be a finance committee for each event . . . and each event will have to stand on it's own," Mr. Shannon said. "It's likely to be the tightest fiscal control of any of the nonprofit groups."
In fact, Mr. Shannon said, the "margin of profit" from each of the events is one of the ways the board hopes to pay off creditors.
Board members declined to offer specifics on possible payout plans, saying that proposals for repaying creditors vary, depending on the individuals and companies still owed money.
"One of the overriding principles is that we have to be equitable to everyone," said Mark J. Friedman, an attorney who is working for the Preakness Celebration board to deal with the deficit problems.
"It is not our intention to walk away from any of the debts," said Barry F. Scher, a vice president of Giant Food Inc. and co-president of the volunteer board.
Mr. Scher said that next year's festivities will mark a return to the events that have been financially successful in the past, including the Preakness Parade, the hot-air balloon festival and a 5-K footrace.
This year's big money-loser -- the two-day Music Fest '95 at Rash Field, on the south side of Baltimore's Inner Harbor -- will not be back, he said.
The board is "still up in the air" over a second new event, the Preakness Eve Bash -- billed as "the alternative cocktail party for progressives," featuring rock singer Deborah Harry this year.
The last two events -- both developed and promoted by Ms. Leonard -- created the biggest financial problems this year for the Preakness Celebration.
The board has blamed Ms. Leonard for pressing ahead with the events, despite early warnings of poor attendance and ticket sales, and leaving them with the $1 million deficit.
Preakness Celebration did pay nearly $750,000 in bills associated with its weeklong series of events May 12-19, which included street festivals, concerts, a ball, a parade and a hot-air balloon launch.
But the nonprofit corporation still has $999,285 in debts -- much of which the board has blamed on Ms. Leonard.
On the advice of her attorney, Ms. Leonard has declined comment. Her attorney, however, has pointed back at the board as part of the problem, for its lack of oversight and direction.
Deputy Attorney General Ralph S. Tyler III said that last week his office received documentation -- mostly copies of checks -- it had sought from the board, in an effort to determine whether to launch a formal investigation.
Mr. Tyler said a decision on any possible action would be made in the next two weeks.